The US Thanksgiving holiday is not only a time for us to reflect on the blessings in our lives, but it’s a perfect reminder for us to take stock of our accomplishments.
Cash flow discounted cash flow notes often come with a pre-determined schedule of payments. This simply means that you can expect to receive a periodic flow of cash from the note, perhaps in the form of interest payment.
Isn’t that interesting… (Note the underlined sentence above) But, how does that relate to property? Think of it this way; each cash flow property that you own can be considered its own “company”. That is each cash flow property has income in the form of rent, and expenses in the form of taxes, maintenance, or debt service. So, just like large companies have income and expenses, you as an cash flow property investor will as well.
Establish clear payment terms and expectations with your customers and have a formal receivable collection process in place. Consider discounts for prepayment or require a deposit for large purchases.
By automating the process of politely asking for referrals at your customer satisfaction stage of relationship you will obtain at least one new customer via referral for every four customers asked. It’s like buying five customers and getting one free!
Cash Flow Tip No 9 – When things get tight, triage your payments. Call all your suppliers and negotiate extended periods or deferred payments. Don’t pay the biggest debt first, pay the most important.
Knowing these things would help you assess the business itself whether it is growing or not. This also gives you a bigger picture of what is happening in the company that you started. Making changes will surely come but you also have to look closely whether it would do you good or better postpone it for a few more months or years. In addition, when you see that there is a new trend or tool related to your field, you could ask your staff to check whether the business would be able to use it or not. Evaluation is necessary in everything you do. You should not trust your instincts at times especially if what you want to try is relatively new.
Cash Flow Tip No 10 – Link sales commissions to invoices paid rather than revenue billed to motivate your sales team to focus on cash flow as well as sales. The sales team are likely to have a better relationship with the customer than your accounts team, and a friendly follow up gives the sales person a reason to speak to the customer again – and perhaps even lay the ground for another sale.