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Smart Business Start-ups by Infinite Ideas

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32. Peter paying Paul

In an ideal world your customers would pay you before you had to pay your suppliers, but it rarely works that way. To stay afloat, you need to manage your cash flow.

In the majority of businesses, the pressure is on you to spend before you get paid. Effective cash flow is about ensuring that you have more money coming in than you have going out.

For sales to take place you will need to order products and materials, supply them to the customer, invoice them and, in many cases, wait to be paid. For this you will need a trading platform (a shop, office or website) and staff, which all costs money.

So how does it really work? You order the materials and services you need and sell them on to your customer, but it is the terms ...

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