Abang Abu : CASHFLOW

Its been sometime since I talked about Abang Abu’s post. Abang Abu has recently published his own WORK BOOK. This book consists of instructions that can help you do your budgeting and calculate your CASHFLOW.

For those that are running a business and you have not really set your budgets and accounts right, I recommend you to get this book as it will tell you how much you need to allocate your savings, spending and investment budget using the TRADEMARK technique called MONEY COMPASS or KOMPASS WANG.

Its a work book which makes you write something on it - something like those workbooks in schools. It is also a guide and will help you assess your own financial fitness.

Click here for more info..

Abang Abu has also written a great post on CASHFLOW. So here’s a new acronym that he have come out with.  

CASHFLOW

C- Collect - Collect the cash fast . After every job that is done make sure you get your payment immediately . This will give the business the cash for the project. This is very critical for a new start up or new set up. Do business with those who can give you cash fast.

A-ASK- Ask for deposits for any orders that you get from customers. By asking for deposit will give you the extra cash that you might need. This will also make the customer serious about their order. Keep in mind always ask for deposits. The range is between 10% to 50%.

S-Sell- Sell off any old inventory or unsold goods that you might have. Sell it for a discounted price or at the cost price. This will give you the extra cashflow that you might need to use for next stage.Its better to get rid of old stock and get new things.

H- Have Systems- 1)System of collecting payment and issuing invoices. This is important so that there will be a way that you can track on the payment that you should receive.

2) System of credit check on the customers- This must be done to make sure that your customer have the intergrity as well the capacity to pay you. Especially for those request for credit terms.

F-Find- Find all the financing option available out there . What are the facilities that can be tapped. From Government schemes or even from banks. Have some credit facilities ready as it might be useful when you need them. Keep informed on what the latest scheme that available that will be useful for your business.

L-Leverage- Leverage on the credit terms available from your vendor. Always pay on the last due date. This will keep your cashflow healthy. Talk on longer terms with your vendor as this will give you the time to sell the products and than pay from the sale. This is a  good strategy for those who are really have tied cashflow.

0-Offer- Offer discounts for those of your customers who pay cash and make prompt payment. This will make them to pay cash and fast.

W-Watch- Watch your business expenses carefully so that your expenses is withing the budget. This is critical as many business owner will use the cash available for their own expenses . PLEASE DO WATCH THIS.

If you are new to business, please understand this word CASHFLOW very clearly. Its the mother and lifeline of business whether you are small or big. Your cashflow is the one that says that your business can suvive a long time or not. It potentially 

Taken from: http://abangabu.com/biztips/biz-tips-cashflow/

 

Goals & Focus

During the Cash Flow workshop yesterday, I manage to help a few people to understand the power of setting a goal. From an investment of $1,000, I managed to help them to get $30,000. This is based on paper money. What’s more important that I wish to stress is the principles behind GOAL SETTING.

So what did I exactly do..

During the Cash Flow Game, I observe that the participants were not taking too much risks. Its their first time playing thus I did expect the behaviour. So I came to this guy ( Sorry I can’t remember his name ) to ask him, “This share cost $10 and it has the potential of making $40 per share, if you were to invest how much money would you want to make?”. He answered, “I want to make as much money as possible”.

Do you know what’s wrong with the answer? Well it is not a wrong answer but the answer will not get you anywhere because you don’t have a real target. Telling yourself that you want as much money as possible will not manifest any results because you dont have specific targets. So you need to create real goals such as I want to make $10,000 from this investment.

By saying that alone, he understood the process first. He understood that its possible to achieve that $10,000 based on my explanations about shares. When you know what you want and understand how to get it, you will be more confident in achieving that figure. After a few throws of the dice and cards open, he did made the $10,000.

The same thing happen to the lady sitting beside this guy. She was offered shares at $1 and I told her to buy more shares. So she bought 1000 shares worth $1 each. The price of the shares went up to $30 and that alone got her $30,000 after a few rounds. She too understood the process.

When you understand how to get there and have a goal precisely set, you will work towards it and achieve it someday.

I made tons of mistakes in the past. I had targeted to hit my First Million Mark in March on the 26th Birthday but it never came true. Why? I saw those numbers but the problem is I do not know how to get there yet. That was why I was not churning the exact results that I need to achieve.

Now i had to realign my goals. Now I’ve set my goals to hit $10,000 of personal income by July 2008. I believe this is more realistic and achievable and I know how to get there. So that’s about $5,000 per month for May and June.

This can be applied to anything. Know what you want and understand the process to achieve it.