An Intro to Cash Management for the Waco Entrepreneur

Ardent Authors Photo

Jason Lavender

Ardent Authors Photo

Jason Lavender

Jason Lavender

Jason Lavender

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This month, we’ve already talked about why saving is so important for your business. (Check out the post if you haven’t seen it!) However, saving is really just one part of your business’ financial strategy. Other key pieces — a.k.a. spending, earning, and investing — must come together in perfect harmony to keep each dollar running smoothly in and out of your business. As an entrepreneur, you’re probably thinking, “Sure, but, easier said than done.”

We get it. Cash management is critical, but it’s hard to get right.

That’s why, as an advocate for small business in Central Texas, we dedicate lots of resources to it. We don’t just offer accounts. We back them up with one-on-one, expert support from our local Waco team.

Below, learn more about cash management and why TFNB is the best place in Central Texas to find the comprehensive services and friendly support you need to make it happen.

What is Cash Management?

Before we get any further, let’s define what we mean when we talk about “cash management.”

An Intro to Cash Management for the Waco Entrepreneur

What is Cash Management?

Cash is fuel for your small business; you have to put enough in your tank to get where you need to go each month. Ideally, you would generate enough cash from sales and other activities so you can meet your expenses, repay debts, and find ways to invest in the growth of your business. When you don’t, you either have to rack up debts to keep things running, or forfeit aspects of your business that could affect future cash-earning potential.

Here’s another important characteristic of cash flow: it’s honest. While it’s not hard to exaggerate your earnings with a little creative accounting, it is pretty hard to fudge the numbers on your cash flow statement. How your business manages cash is often indicative of the real financial health of your business. Additionally, cash management:

  • Can make or break investors’ decisions. Banks or private investors look to cash flow statements when determining if they want to invest in your business or what the terms of the investment should be. Because cash flow offers a better indication of how financially sound a company is, it can be the thing that helps you get approved for a loan, or land a sizable investment when it comes time to scale. 
  • Helps you find ways to increase profitability. Cash flow statements have a way of indicating where the strengths and weaknesses of your operations are. By cutting unnecessary costs or increasing lucrative operations, you can fine tune your operations to minimize activities that siphon away too much cash.

Looking to expand your cash management know-how? Why not start with a good book?

Here are a few highly-rated, practical reads to get you started:

An Intro to Cash Management for the Waco Entrepreneur

Show That You've Done Your Homework with Thorough Niche & Market Analysis

It’s important for you to identify the niche that your company’s product or service is catering to. This shows evidence of thorough and crucial market research analysis in the industry. Key questions to keep in mind are:
  • What is the value of the product or service being offered?
  • How profitable are these products or services in the current financial climate and the existing market?

Investors or lenders always want to know why your product or service is better than the competition. Therefore, comprehensive market research and analysis are vital building blocks of a successful business plan.

Before we get any further, let’s define what we mean when we talk about “cash management.”

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