Do you want to learn about managing cashflow to expand your business and understand why a Profit First approach can work.

It can be difficult to know how to manage cashflow, especially for growth, as there are few designated ‘cashflow growth specialists’ other than banks who have a vested interest in your borrowing now.

Your business may suffer as a result, either lacking growth or taking on too much risk, leaving you uncertain of the best way to go about things.

However, it doesn’t have to be this way. Although cashflow planning can undoubtedly be difficult, a Profit First approach can provide a substantial help.

A Profit First approach means you will regular put money aside into a ‘Profit Account’ and pay off debt and/or build up a reserve, as well as take care of tax when it’s due and ensure you don’t overspend on operating expenses.

Following a Profit First approach and paying your profit first will help expansion in at least these 4 ways

  1. If you choose to take on debt to fund expansion, the funds in your Profit account can act as a buffer should you struggle to make debt repayments
  2. If you want to take on a mixture of debt and use of your own funds, you can use the Profit First approach to put funds aside into a ‘business growth’ account, to ensure that you steadily develop the funds required for growth.
  3. If you want a bank loan, you are far more likely to obtain bank approval with a ‘healthy balance sheet’ that has resulted from following Profit First principles of always paying profit first, paying off debt and taking care of taxes when the taxes are incurred.
  4. Being in the habit of paying profit first and managing cashflow well will enable you to more easily manage any extra debt taken on to expand your business.

So if you’re looking to expand your business, make sure you pay your profit first and follow the Profit First method of managing your cash.