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“Cash Flow is King for At Home Based Business Entrepreneurs!â€

By Guest Author On July 31, 2011 Under Success Secrets

Cash flow is the lifeblood of any at home based business. It doesn’t matter if you like it because the bottom line is, cash is how business keeps score. If you don’t have enough cash on hand, you won’t have the ablity to pay your suppliers, your employees and/or out-sourcers, or interest payments toward any borrowed funds. Without adequate funds, you’re home based small business will go under soon enough.

Cash flow is the movement of cash into your company and out again. You may have sold tons of goods and have got a fistfuldrawer-full of billing invoices as evidence, you can’t change those invoices into cash or take care of your sales tax bill or settle your monthly insurance commitment using them. You need the money. At this point, you should be able to see that whether you’re just trying earn extra money from home or have a full time at home based business, understanding cash flow is critical to your success! 

Cash Flow Management

Controlling your cash flow can pretty tough, and your company policies concerning how you extend credit to your customers, the amount of customers you have, and how quickly they settle their bill, for example, may all add up to make it much too difficult to manage without some help. When it gets this complicated, smart work from home company propriators turn to high-tech tools to assist them in getting control of the process, the hazards and the opportunities. 

Profit and Loss

Cash flow isn’t the same as profit and loss. The fact is, a top home based business can be profitable while experiencing cash flow issues  that force it to failure. Profit as thought of by accountants, includes non-cash parts and calculations. Cash flow is a “just the facts” number that just takes into account “cash in and cash out”. If your cash inflow is better than break-even but you should put money toward new home work space and supplies to decently build your growing firm, cash flow could be a problem for some time.

Cash flow may be even more difficult to predict than profit and loss, specially for some at home based business people that are dependant on a few large clients. You could be able to guess when you will close a transaction and earn a profit. But you could have little control over when your clients pay you and have the capital flow into your pocket. 

Payments and Receipts

Ready capital is not the balance in your home based small business checking account. Your money balance in your check book needs to account for checks you have issued that have not yet been cleared by your bank. You could have customers payments in hand that have not yet been deposited in your bank. That’s cash that needs to be accounted for too. 

Where does the money come from? For many top home business owners, the decisive source of money comes from transactions with customers. This may not always be a direct path, though. Many firms extend credit to clients, so the sale lingers around as an account receivable, before the customer makes a payment for what was bought and the receivable turns into to accessible money. Capital can also come from lenders or an investment return. 

Where does money go? Just about where you would expect: to pay suppliers, out-sourcers, taxes, investments in your work from home company, etc. It could also be applied toward repaying debt or render an investment return to those who my have invested in your business.

Bottom line: Cash is king!

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Statistics say that most people miss at least one MAJOR opportunity every year. The fact is that if you took advantage of all the opportunities that you have missed, you’d be better off than you are now.

Laying the right foundation to launch an at home based business is one of those opportunities!

Our North Star At Home Based Business Success System will change your life TODAY! Click HereRIGHT NOW — to “ROCK” Your New Top Home Business!  We’ll show you how!

 

 

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