Cash is King!
Why Cash Is King For You?
For two reasons this is a very famous saying in almost all sectors but is not well known in aesthetics and beauty, the reason being is that a lot of people go from being a therapist or working for the NHS, to owning their own clinic or Spa overnight without much experience in-between running a business.
Cash flow management is absolutely crucial to your business as well as all the other businesses on this planet. Many profitable and successful businesses have collapsed due to lack of cash in the bank!
It’s all very well making huge profits on the back of successful sales however if people aren’t paying you on time or in fact paying you at all, then you could be making £10,000,000,000 (£10 Billion) in net profit and it wouldn’t matter as your business would crash and burn without cash at hand and in the bank to pay staff and suppliers!
What I actually recommend is a very simple spreadsheet, split into two halves, with the left side listing all money you expect to receive in the next 8 weeks, with a description of the income (typically the names of your customers) and the amount inserted in the relevant week the money will hit your bank account. Then on the right side of the spreadsheet, we do the same but this time for expenses.
You can then get your weekly net movement of cash position e.g. if you have income of £10,000 that week and expenses of £7,000 then you will have a net cash inflow of £3,000, this amount will then be added to your starting bank balance for the week to give you an accurate and timely record of how liquid your business is. Liquidity is key whether in business or for your own personal finances.
If you would like the spreadsheet template I have created and that my own company, The Skin Repair Group uses, please email training@theskinrepairclinic.co.uk for your free copy.
Cash flow ties in very nicely with a few of my previous points about deposits and rebooks straight after a treatment. If you are booking customers in 4 to 6 weeks in advance and they are paying you 50% deposit at the time of booking, you have an amazing business spitting out cash!
It’s the type of business others will be the envy of, as for a lot of companies to actually get paid when they have done the work would be heaven for them as they will often have to offer 30 days’ credit (whether they get paid within those 30 days is then a massive battle in itself!) never mind getting half the money 4 weeks in advance!
The above point is magnified even further if you’re taking rebooking deposits for 8 or 12 weeks’ time, we are now entering cash flow heaven…
Key Point
Get your free copy of The Skin Repair Group cash flow spreadsheet to help manage your businesses cash flow by emailing us training@theskinrepairclinic.co.uk.