Hustle and flow

Whether you’re a startup or you’ve been around the green industry for three generations, cash is responsible for your survival. 
   
The amount of cash the owner of a landscape business has at his disposal often reflects the overall health of the company. You can survive for a while without profits, but if you don’t have money coming in the door, you’re doomed to fail.

To give your landscape business the best possible chance for survival you need to have sufficient control over the cash flow coming in and out of your company. Obviously, you want more cash coming in than going out, but to ensure this is the case you need to have a solid grasp of your cash flow. This is important not only to keep things running, but also if you plan to borrow money or expand your landscape operation in the future.

It’s important to remember that there is a difference between cash and profit. If poor cash management is reason most businesses ultimately fail, then poor cash flow is why the majority of start-up businesses don’t make it to their first anniversary.

Some examples of the cash flow that will be coming into your landscape business include:

• The payment for maintenance, design/build  and other landscape services from your customers;
• Any bank loans that you may have taken out;
• Interest that you collect on savings and investments; and
• An increased bank overdraft or loan.

Some examples of the cash that will be going out of your landscape business include:

• The purchase of any plant materials, equipment or chemicals your business needs;
• Any repayments of loans that your business may have;
• Taxes – income, worker’s compensation and property;
• Your payroll, property rent and all of your daily operating expenses; and
• Reduced overdraft facilities.

Cash flow depends on the timing and amounts of money flowing into and out of the business each week and month.

To establish a solid flow of cash within your business you need to ensure that your pattern of income and your business spending habits allow you to have enough cash available as well as allow you to pay your bills on time.

To help you with your cash flow management it’s a good idea to keep an up-to-date record of all of your cash so you can see exactly what is coming in and going out of your business. This way, you can pinpoint areas where your cash flow dips too low and work to improve it.