Cash is king in business. Without cash your business cannot survive. Ignoring this basic fact puts your business at great risk. Adopting the practice of protecting your cash flow can help you stay in business, turn a profit and grow.
Businesses generate cash by various means. Typically, the majority of cash flowing into your business will be through the sale of your products and services. But you may also generate cash through loans and credit card pro-
ceeds, the sale of assets and owner investment. Generating cash can be much harder in market downturns, recessions and with inflation. Cash flows out of a business through the same channels: operating expenses, loan and credit card
payments, the purchase of assets and owner withdrawals.
What is the practice of protecting cash flow? It is anything that improves the inflow of cash and reduces its outflow without impacting the quality, sales, delivery and customer service. To grasp this better let’s look at common practices that can have the opposite effect. Reducing your workforce, cutting corners on ingredients, manufacturing and service, and stopping all marketing efforts are typical knee-jerk reactions that greatly impact your ability to con-
tinue to generate cash flow and stay in business.
The best practices for protecting your cash flow benefit both the inflow and outflow of cash, and protect your entire business through improvement. Where do you start in protecting cash flow? Review and audit your operations, the cost of all sales. Stay close to your core services. They are your strengths and that which sets you apart from others. Reduce costly products or services that detract from your brand and reputation, and do not generate enough sales. Look for alternatives that can reduce labor, inventory, warehousing, shipping, and so forth. For example, drop-shipping can greatly reduce operating costs. Buying the same product from a supplier with lower minimums can protect your cash flow.
Tailor marketing efforts to drive more targeted results. Sales, limited time offers, exclusive offerings, and strategies that get you in front of your customer can stimulate sales and increase cash flow. Learn to market smarter, not harder or most costly.
Lastly, protect your cash flow by improving your ability to collect payment. Invoice and collect payment upon delivery of the sale of your product or service. Accept credit cards and add e-commerce to your web site to accept online payments. You may also be able to collect a deposit at the time of sale, prior to fulfillment. Unless lending money is your business, avoid financing customers.
At the end of the day, protecting your cash flow means protecting your business. Protecting your business gives you a better foundation to weather the storms. | 
