#TheMoneyFactor Episode: 007 – How do you manage your cash-flow and expenses and maximizing the value of your business
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Today on The Money Factor, I have Steve Nevin from B2B CFO with me. Great questions coming in, managing your cash flow, your expenses, and maximizing the value in your business. That’s today on The Money Factor. Hi, and welcome to episode seven of The Money Factor. I’m Ian Varley, CEO of Eagle Business Credit. Very pleased to have with me today Steve Nevin from B2B CFO. How are you doing?
I’m well, thank you.
Awesome. Steve and I have looked at quite a few pieces of business and some companies that are in need of help. So we’re gonna have an interesting episode today, I think. We’ve got some great questions coming at us, so let’s take the first one. So, you’re growing your business. That’s fantastic news, but yes, things can get out of control very quickly. And overhead is a killer, if you don’t keep track of exactly how you’re spending you’re cash. Everybody’s heard the adage, “Cash is king.” If your cash is being spent on expenses and you haven’t got control of them in line with the growth, then you will quickly have a cash flow problem. I’m sure you see that, Steve, from time to time.
Oh yeah. In fact, this is an issue that quite frankly keeps us in business, Ian.
Absolutely. Yeah.
The important thing here is that business owners need to understand what the financial statements are telling them.
And so, what we do is help owners understand trends in their business where they can identify expense items that are growing faster than their revenue.
Right.
Those are the areas that business owners need to focus on and pay attention to if they expect to keep their margins in check and keep their overhead down.
Right. Yeah, you’re right on point. This is The Money Factor, so we’re talking about cash, and if you’re spending money on expenses and you’re not keeping a close eye on them, things will get out of whack very quickly. It’s great to grow, but do it in a controlled way. Keep control of those expenses. If you need help, companies like Steve’s, B2B CFO, are there. And you don’t have to go and employ somebody to do all of your accounting for you, necessarily. If you’ve got a particular issue and you want it looked at, call on and expert, and get them to come in and give you advice. Because you could have something that’s creeping out of control without you really noticing it or realizing it. So, great question. Managing cash flow, yes. I’m all about that. It’s really the lifeblood of the business. We see it, again, too often, that people don’t realize that just because you’ve got orders, and new customers coming on, if you don’t have a way to make sure that you can finance those orders and produce your product, deliver your service, then you will run out of cash. “Cash flow is king.” I say that too often, I’m sure, but people don’t realize it, right?
No, you’re absolutely right. We often run into business owners who look puzzled as their revenue top line is growing. They can’t understand why their cash flow isn’t growing with that event. This is a timing issue, right? Business owners soon understand that profits and revenue are one thing but the cash available to pay the bills, is a matter of timing. And so, we work with business owners to make sure that they’ve got the proper cash flow mechanisms in place, they’ve got the right financial controls in place, and most importantly, particularly in this very active economy, we make sure that they’ve got sufficient lines of credit in place so that they can grow their business. And of course, Ian, that’s where you come in.
Absolutely. We look at that all the time. If you’re granting credit to your customers, you’re very quickly gonna find that your working capital is tied up in your receivables. So what we do at Eagle is release that for you. So Steve and I work well together looking at companies because it is something that gets overlooked very quickly. We want you to grow, we love that. But you will, if you’re not watching it, grant credit, and see that the payments don’t come in as quickly as perhaps you expect. And all of a sudden, you start running out of cash.
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