"What guard rails should I have in place for my cash flow that'll tell me if things are going badly or going well given all this downturn talk?"
There’s a lot to consider when looking at the financial health of your agency or firm, but definitely a few places you can start.
A few key numbers I'm always monitoring for my clients are:
12 month rolling sales + booked revenue pipeline (informs how much work can be somewhat reliably be predicted)
burn rate (aka if more money is consistently going out of the bank account vs. coming into the bank account something has to change)
runway (aka how many months the client needs to have in the bank to feel comfortable. If we're tracking to having less than that, something has to change)
Now, I don’t want you to get overwhelmed if you don’t already have these in place.
I know you don’t consider yourself a “numbers person” and you also wear 1,000 hats in your business. And as you get beyond mid-6 figure revenues, you should be spending your time on what you love and what is most valuable for the business, which is landing more work, leading your team, and making decisions for the strategic growth of your business.
If you want to learn more about how I can help solve your cash flow woes, book a complimentary call. I’m here to help!
