Business Quarterly: The art of cash flow 

  • Nisa Simila COURTESY PHOTO

For the Ledger-Transcript
Published: 7/25/2023 10:19:11 AM

Being able to have enough money coming in to pay the bills and put some into savings is a beautiful feeling. However, if you don’t know where your money is going and when, you may find yourself not meeting your obligations.

Do you have enough cash on hand to buy supplies for your artwork? Are you able to achieve that bucket-list goal of going to the Bahamas without having to pay your rent late? If the answer is no to either, but you are expecting to be able to catch up on your next payday or next week after the art fair, then you have cash flow issues. 

Common causes and simple suggestions 

Whether you are in the business for yourself or if you are just trying to manage your household finances, here are a few common causes of cash flow problems and what you can do about them. See if you identify with any.

No budget – There’s the B word. We may not like it, but like taxes, it’s a necessary evil.  It helps you understand your finances so you can make sound financial decisions such as buying a new car or a new piece of equipment for your business.

Suggestion -- The 50/30/20 rule is a common budgeting tool in which you divide your income into three categories: 50 percent on needs such as rent and groceries, 30 percent on wants such as eating out or upgrading a cellphone every time a new one comes out and 20 percent on savings.

Our volunteer money coaches can help you create a budget based on your situation and with your goals in mind. You might find that you don’t have enough income to cover your expenses, but you and your money coach can assess where expenses can be shaved off or maybe even ways to increase your income. 

No emergency fund -- You were depending on the big art fair to make money, but it was canceled due to weather. All of a sudden, you are left without expected income you were relying on to buy more supplies. Maybe your car breaks down and you don’t have extra money to fix it. That’s a problem.

Suggestion -- Cut non-essential expenses. For example, If you subscribe to various streaming services and don’t watch TV, cut the cord! When you come to money coaching, you and a money coach will assess your expenses and income together and find ways to maximize your savings. 

Excess inventory -- Having too much of a good thing, either in business or at home, can tie up cash. Goods might not move as well as you expected or you happen upon a great deal on a case of paper towels so you put the purchase on credit.

Suggestion -- Look at your history or previous patterns. Take stock of your inventory. Based on your business history, project how many products you’ll move in a month and make just enough. Determine if you’re using more paper towels than you normally would just because you have a surplus. Just buy or make what you need. 

Not having a strategy -- You have created a budget. You know how much money you have in the bank and what your expenses are. You know where you are, but do you know where you want to be? Maybe the thought of becoming a homeowner is your lifelong dream. Maybe you might want to upgrade a piece of equipment that makes your business more efficient. How will you get there?  

Suggestion -- Set goals for yourself and/or your business. Look at your operations. What are the areas of your business that have the best return on investment? Put your money into those areas that serve you best or find ways to shave your expenses so you can put more into savings to achieve the goals you want. 

Identifying causes of cash flow problems is the first step in gaining control over your finances. Doing so allows you to make informed financial decisions for your business and/or your life. Money coaching is free, confidential, and tailored to your needs.  

When you work with one of our money coaches at The River Center, you are in the driver’s seat and they are your wing person. They can’t tell you what to do, but they can frame your financial picture with you and cheer you every step of the way. Call us at 603-924-6800 or visit our website at for information on money coaching or any of our other programs and services. 

NisaSimila is the communications and money matters coordinator at The River Center – A Family and Community Resource Center in Peterborough. As money matters coordinator, she oversees the financial wellness programming and the Volunteer Income Tax Assistance Program. 

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