It sounds simple, but making sure your company has more money coming in than going out is one of the most important tasks of running and growing a business. Sometimes, however, it’s easier said than done.
Take it from Tricia Clarke-Stone who, along with hip-hop music mogul and entrepreneur Russell Simmons, co-founded a creative agency called Narrative. As CEO, Clarke-Stone knew early on that she wanted to diversify revenue streams while staying true to the brand’s passion for storytelling, innovation and bringing new ideas to life.
Additionally, Clarke-Stone has implemented systems that help keep tabs on the flow of money and ensure that Narrative has the resources it needs to grow. Here are three of her best tips for managing cashflow at any business.
1. Diversify revenue streams.
First and foremost, try not to rely on only one source of revenue to drive your business forward. “If one well dries up you want to make sure you have something else to take its place,” Clarke-Stone recommends.
2. Discuss cashflow regularly.
Always keep on top of where your money is coming from, how much is coming in and how much is going out. “We have a forecast report that we’ve put together that tracks accounts payable, accounts receivable, and then what we have pending in terms of our projections,” she says.
3. Negotiate payment timing.
There’s nothing worse than completing a project or campaign for a client and then having to wait and wait for payment. To help mitigate that risk, Clarke-Stone says she negotiates payment upfront, so that Narrative gets paid at least a portion of the invoice before work begins.
Read more: Entrepreneur