If you are an entrepreneur, you understand the importance of positive cash flow. However, this is not only important for the entrepreneurs in the group. Everyone needs to understand how to generate positive cash flow! Cultivating these habits will reverse your losses in a big way and build passive income. Consider the following habits and examine how to implement them in your life.
Adopt these Habits to Generate Positive Cash Flow
Avoid Needless Debt
This is the simplest piece of advice I give, but often the most difficult to apply to everyday life. Here it is, the secret sauce for generating positive cash flow: If you don’t have the money for it, don’t buy it!
You don’t need many of the things you buy, whether they be for your business or personal use. I have mentored many real estate investors who get lost in trying to get the latest and greatest things in their rental or when they’re flipping a house. Most of that stuff won’t make much of a difference in your bottom line anyway! I have a great free resource on that exact topic, click here to view it! Try this rule: if you are considering making a purchase, sit on the decision for at least one week. If at the end of the week you still believe you need to make the purchase, then do your research and find a great deal. However, never allow yourself to make an impulse buy while walking around the store. Use the one-week rule. It’s incredibly helpful for avoiding unnecessary debt.
Investing in yourself and being frugal with your time is a great life skill to develop. Just as we need to understand the value of our money, we also need to understand the value of our work and our time. Just because you’re an entrepreneur doesn’t mean you’re motivated all of the time. I encourage you to list out the top three things you need to get done every day that are going to move your bottom line. Do you need to get your paperwork together so you can turn it in to put an offer on a house? Do you need to be writing content for your online course? Choose the most important activities that will contribute to your success and focus on those. When you focus on minute busy work, you’ll find you spent hours working on something only to have accomplished nothing.
Don’t try to drive without a road map! Set clear goals and give yourself a target. Once your business starts making money, what are you going to do with it? Buy a new car or reinvest it in your business? Without a plan, money quickly disappears.
Sit down with your business partner or accountant to come up with a plan for your money. Set goals to keep yourself on track. You may want to set aside a certain amount of money each month to pay off the business loan you took. Whatever your goals are, make a plan!
Adapt to Change
All in all, it’s important to stay flexible and adapt when you need to do so. Sometimes your plan won’t work out. This is why it’s essential to keep yourself open to opportunities and other options.
Follow these habits to generate positive cash flow, but don’t become so rigid that the process is no fun. Make it fun for yourself and your business. Talk about cash flow often. Then, when something isn’t working, adapt. Change is good.
Taking small steps like these and cultivating essential habits will dramatically increase your ability to generate cash flow. Share with me: What habit would you add to this list? How do you generate consistent positive cash flow? Let me know in the comments below!