What is Your Cash Strategy? with Lisa Dionisio | CFC 244

Prioritize building a cash cushion equivalent to three months of operating expenses before expanding your business or hiring new staff to ensure financial stability.

Align your project payment schedules and deposit requirements with your actual cost outlays, especially for long-term projects, to prevent financing your customers.

Regularly review and eliminate unnecessary personal spending run through your business account, and meticulously audit recurring subscriptions and overhead costs to free up cash.

Understand your true costs, including labor and overhead, for each project to accurately bid and ensure profitability; utilize job costing to track actual expenditures versus estimates.

Be proactive in collecting receivables, and consider the value of credit card payments (even with fees) if they significantly shorten collection cycles, potentially passing the processing fee to the customer.

Cultivate relationships with bankers and secure a line of credit when your business is healthy, rather than waiting until a cash crunch, to have a flexible safety net.

Know your worth and avoid underpricing your services or making excessive concessions to clients; value your profit margin and resist taking on projects that don't meet your financial goals.