Business Corner: Do's and don'ts of successful business - Part 3

woman business owner standing in front of shop

Do's and Don'ts of Successful Business

This is the third part in our successful small business basics series. We love entrepreneurs and what they contribute to society and the economy. And we love working with them! 

Here is a recap of what we've covered so far:


  • Create a roadmap for growth

  • Diversify


  • Forget to plan for trouble

  • Wait to get help

Our third suggestions:

DO #3: Project your cash flow

One of the best things you can do to get control of your business is track your cash. QuickBooks Online now has a built-in cash flow tracker, including a function for projecting your cash needs. A downturn, a new project, or an increase in business can all affect your cash. Being able to plan for upcoming events allows you to be proactive in managing your business in a way nothing else can.

I've recently implemented the Profit First method of cash management for my own business. It's an intuitive way of managing your cash using various bank accounts that makes you assign a job to every dollar. It gives you insight into your cash using what you already do - check your bank account every day. If you want to read the book, it's called Profit First by Mike Michalowicz. I highly recommend it and can help you with implementation if you are interested.

DON'T #3: Use cash to buy long term assets

Even if you are awash in cash (yes, it happens!), it's better not to spend it all on large purchases. I knew a very successful young entrepreneur who took all his cash and bought not one, but two, hot and very expensive cars. He later had some very tight cash problems when business wasn't doing as well as the highs he had experienced. Just because we've had a great month, or a few of them, that doesn't mean things won't change. So in many cases, it's better to finance large purchases and preserve cash for either of two things: 1) a downturn in business, 2) an upturn in sales. The time between paying your costs and suppliers and collecting from new business can also eat up cash.  


(Note: thanks to the folks at BDC - Business Development Bank of Canada - for the inspiration for this series.)