How to Create Cash Flow

Video Transcript

"Hello, my name is Emily Gasner, and I'm with an organization called Working Solutions. I'll be talking about how to create cash flow for your business. One of the the things that will drive your cash flow is the amount of sales that you have, so you'll need to make sure you've priced your product or service correctly, something, a price that the target customer that you have would actually be willing to pay for your product. That way you will ensure that you have as many customers as possible purchasing your product. So the higher sales you have, the more cash will be coming in. Now if you sold something but you're not collecting the money the way that you should be, that's going to really decrease the amount of cash that you have that's available. So once of the things you can do to create cash flow is to make sure that if you don't charge cash for your product or service, that you have a very careful method of tracking who owes you money, which customers owe you money, and following up with them in a timely manner to make sure within invoices and phone calls, to make sure that they have paid you for whatever service or product that they actually purchased from you. So you want to make sure that the cash is coming in. Similarly, you want to make sure that a reasonable amount of cash is going out, so one of the things you can do to try to make sure that the cash coming in is always greater than the amount of cash going out, is to try to decrease your expenses as much as possible, which for small businesses is really very necessary to do. So you want to make sure that you are being very thrifty in terms of things that you could cut down on cost. And definitely there are some things--marketing and other tools that you might actually need to spend more on. So definitely focus the cash on where things would most appropriately work out for your business. So try to decrease your expenses as much as possible, try to collect on the money from your sales, and you'll be having more cash coming in then going out. And that's the trick to creating cash flow."