James Blackwell shares three cash flow tactics for growing agencies: check your bank daily and use Xero and Receipt Bank to track money, avoid long-term prepaid contracts in favor of monthly subscriptions, and lease equipment like MacBooks instead of buying to keep cash for reinvestment.
So three tips for managing cash flow in your business. So what I've learned over the past four years when I've been in my business and growing Ronald James as an agency, cash flow cash is always king as a lot of different mentors have told me. And I think the key things to managing cash flow is checking your bank every day. I check my bank religiously in terms of invoices coming in, money going out and having a way to manage. So we use Xero to manage all of our invoices and receipts coupled with receipt bank. So that's probably a cool way to do that. Trying not to over commit to long term contracts, which is a big thing. So for me when I start the business I would do everything monthly subscription. So whether it was technology tools or hacks, you might save 20% if you sign up for 12 month and pay bulk upfront. But I'll protect my cash and I would rather pay monthly and pay 20% more because sometimes some of the tools or some of the subscriptions I might not use for 12 months and I'd rather not pay out. For example, one might be £1000 for the year or it might be £100amonth to £1200 over the year. I'd probably rather pay the £100amonth initially, particularly when I want to protect cash flow rather than pay the full amount upfund. So that would be my second one and I'm, I'm fully. I know exactly what goes in and out so I don't get that give any credit card or any expenses go to anyone else in the business but myself. So I authorize everything. But as the business scales past 20 heads our office manager normally looks after that type of stuff. But I think one of our ethos is number 5D rock if you can zoom in on that after the video would be lean and frugal. So constraints breed resourcefulness. So do more with less is one of our principles in the business. Doing more with less. Even though we're scaling and hopefully reaching £10 million within the next two to three years, it's very important that we have the mindset still of a startup. And that's one of the key things is doing more with less. So can we be without that? I've been guilty as well. Splashed out. Now everyone gets a brand new MacBook when they start. The business started off at the start for cash flow. I would buy the MacBook off eBay. So I pay 3, 400 pounds for a MacBook. So 3 year old MacBook and then now, as we've got bigger, it's worked on slightly cheaper actually. We rent the MacBook, so we do lease higher for over three years, so it's fully under warranty and it's a brand new MacBook, and we pay, I think 40ish pounds a month per MacBook. So it means the cash outlay initially is cheaper. Over the long run we pay more, but it protects the cash, so then that can reinvest that cash in growth, which for us is headcount. So that's probably another tip is to lease more, eventually have monthly subscriptions as opposed to paying up front, checking your bank and using Xero every day. So those are my top three tips, watching your cash flow.
