Week 9 Day 6 Action Items

Day 6

• [ ] Understand potential obstacles to cash flow and how to overcome them.
• [ ] Reflect on strategies to mitigate cash flow disruptions in your business.

Developing an Action Plan to Mitigate Cash Flow Disruptions

Cash flow disruptions can pose challenges to the financial stability of a small business. To proactively address and mitigate these disruptions, follow these simple steps to develop an effective action plan.

Step 1: Assess Current Cash Flow:

• Review your current cash flow situation by examining income, expenses, and cash reserves.
• Identify patterns, such as seasonal fluctuations or slow-paying customers.

Step 2: Identify Potential Disruptions:

• Consider external factors that could impact cash flow (e.g., economic downturns, industry changes).
• Assess internal factors like operational inefficiencies or unreliable payment methods.

Step 3: Establish an Emergency Fund:

• Set aside a dedicated emergency fund to cover unexpected expenses or revenue shortfalls.
• Determine the ideal amount based on your business's size and industry.