A recent article, 6 Common Cash Flow Mistakes to Avoid by Carl Faulds says that poor cash flow management is the number one reason why many startups fail.  Cash flow problems can derail even the most visionary entrepreneurs.  

Here are some common cash flow pitfalls to avoid.

  1. Excessive spending

Definitely there are various expenses that need to be paid like office space rental, supplies, salaries, marketing, etc., but the first few months of a new business is not the time to be investing excessively in projected growth.  Make sure you carefully consider the potential benefit of every penny of extra spending.

  1. Unattainable sales forecast

Mostly,  entrepreneur starts a new business in a commercial office space with high level of optimism, but it is significant that your sales forecast is reasonable. Your sales forecast should be based on historical evidence and real numbers for both your business and the broader sector.

  1. Allowing late payments

You’ll be facing cash flow problems if invoices are not paid within a reasonable period of time– delay in cash collection could derail your business. Create clear credit policy — you can offer a discount for early payment and penalties for late settlement.

  1. Failing to create a financial plan

Your business will be in trouble if you don’t monitor your daily cash flow. Reviewing and analyzing historical data (considering seasonal variations) will enable you to anticipate future cash flow.

  1. No cash reserve for setbacks

If your credit balance is zero and your cash on hand is insufficient, then it can be more difficult to recover from a setback.  Ensure you save money during the good times.


Hiring an accountant can help manage your cash flow properly and keep your business afloat.  Likewise, YourOffice can help you find the right workspace solutions for your startup to thrive.  YourOffice offers you a wide choice of office and workspace solutions: flexible office space, team office space and virtual office packages. You’ll have access to a complete array of office support and concierge services as well as state-of-the-art business technology.

How do you manage your cash flow?  Feel free to share your comments.  You can also visit us on Facebook and Google Plus.

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