IT ALWAYS HELPS to have the right tools to change a tire or repair a leaky faucet. The same holds true for managing cash. The most fundamental tool available to business managers is the cash control plan.
I know that by this time you probably gag whenever you hear the word plan. Every business book you pick up pushes plans. Bankers insist on a repayment plan before they will grant loans. Most likely you are sick and tired of people telling you that you have to have a plan to run your business profitably, when you have managed very well over the years without one.
However, competition in every industry is increasing. To stay competitive, you have to make certain that every dollar counts. Therefore, it seems to me that using planning tools is a small price to pay for survival. I have worked for many years with business owners and managers to make their companies and divisions grow. Of the hundreds of companies that I have provided consulting advice to, I have never seen one that was able to sustain long-term growth without using some form of cash control plan.
Some tool must be available to organize actions and to monitor the success or failure of business decisions. Any business, large or small, is too complex, too dynamic, for the business owner or managers to mentally keep track of every action that must be taken to improve cash flow. Six months from now, when competition has passed you, it’s too late to change direction. With a cash flow plan and a cost-reduction program, you can see where you are heading and take corrective action before it’s too late.