3 reasons why you don’t have more cash in your bank account

Poor cashflow is the biggest reason that businesses fail!

In this episode, I share 3 reasons why you don’t have more cash inside your business bank account and how you can ensure you don’t run out of cash.

In this Episode:
02.41: How to plan your cashflow
04.00: The difference between Profit & Loss Statement and Cash Forecast
05.54: Why you need to know your numbers
09.41: The key to creating strategies for your increasing cashflow




The biggest reason why small businesses fail is due to poor cashflow. In today’s episode, I am going to share with you three reasons why you don’t have more cash inside your business bank account and how you can avoid these reasons, so that you are in a confident cash position. This episode as always, is filled with practical strategies around how you can uplevel your understanding around cash inside your business and create more cash inside your business bank account. Let’s get started.


You’re listening to the Clare Wood podcast, where we talk all things business, finance, marketing, and mindset for entrepreneurs, sharing practical tips, and actionable advice to help you take your business to the next level. Introducing your host: me! I’m Clare Wood, I’m a numbers geek, a travel lover, and a reality tv addict, and I’m here to empower you to create an extraordinary business and an amazing life, because I believe you don’t have to choose between the two. Now let’s dive right in to today’s episode.


You might remember that the last episode I recorded I shared with you guys that I was recording in my office. I’m using a different mic, taking a bit of a different vibe. I lit a candle, had a glass of wine and just spoke from the heart and it was such an amazing episode. I had so much fun recording it, so I’ve decided to channel a bit of that same energy and I’ve had a glass of wine. I’ve got a candle going on, but I am back in my walk in wardrobe just because I want the sound to be as good as it possibly can be for you guys. I know when you’re listening to a podcast, sound is really important, so I’m back here in my wardrobe, but again, this episode I’m just going to be talking from the heart.


I won’t be scripting. I’ll just be sharing from my experience as much as I can in this space. Today in the episode I want to talk to you guys about cash. One of the biggest struggles that small business owners have is with cashflow. It’s definitely something I have experienced firsthand myself. It’s something I see with clients of mine all the time.


So I’d like to talk to you about the reasons why you don’t have enough cash inside your business. So the first reason why I believe you might feel like you don’t have enough money in your business or enough spare cash or enough money in your business bank account is because you don’t have a plan. Just let that sink in for a second. So what does a plan look like inside your business?


How to plan your cashlfow


So there’s two different key things that I think that you need to do inside your business to make sure that you have a plan for your money.


The first is to create a budget to work out exactly what money you are planning to bring in in sales every month for the coming 12 months. And also what expenses you have going out inside your business. So this is a budget, creating in the space of profit and loss. So I always recommend to people and with my clients, we always create a profit and loss budget for a 12 month timeframe. That’s the first thing that I really, really recommend that you do. You have a plan, you know how much profit you are going to be making inside your business and once you’ve got that plan you can then go, how can I make sure that I’m delivering on that plan?


The difference between Profit & Loss Statement and Cash Forecast


The second thing in the space of planning that I think that you need to be right across is a cash forecast. Now a cash forecast is very different to a budget and let me explain what the distinction is.


Firstly, a profit and loss statement or your budget, will be looking at the income as it is earned. So it’s when you actually send out the invoice that you recognize that income, if you are accounting on an accrual basis. With a cashflow forecast, it’s really focused on when cash is coming in and out of your bank account and when you were doing cash forecasting. Look, all businesses different. I’ve definitely worked in organizations that forecast cash for 12 months in advance. As small business owners, I don’t really believe it’s necessary. I generally say sort of 6 to 12 weeks is a good timeframe to be forecasting your cashflow looking forward, so cashflow or cashflow forecast is having a look at what money is coming into your business and flowing out of your business and at what time.


I truly believe that one of the biggest things that you can do to create more cash inside your business is to create a plan in the form of a) a budget, a profit and loss budget for your business and b) a cashflow forecast.


If you don’t know how to do a cashflow forecast or if you don’t know how to create a budget, stick around, I’ll be sharing how I can help in this space. They are two really, really important tools for you to use to make sure that you’re right across cash inside your business.


Why you need to know your numbers


Now the second reason why you might feel like you don’t have enough money inside your business is because you don’t know your numbers. Even people who do think that they know their numbers don’t know their numbers. Getting really intimate with what money is coming in and what money is going out and being right across your budget, being right across your actuals, comparing the money that comes in that actually comes into your business with what you had planned to be coming in, is absolutely crucial in ensuring that you have more money inside your business.


So knowing your numbers is so imperative. Even people that I work with, even clients that I work with that feel like they’re right across their numbers, when I really get into this with them, they’ve sometimes have that lightbulb moment and they go “Oh, I’d forgot to account for tax” or “I hadn’t actually checked that my wages were coming in at the same rate which they were forecast”. So making sure that you know your numbers inside out is the second step to making sure that you’ve got more money inside your business.


If me talking about numbers is boring, if you’re thinking, I don’t want to know my numbers, let me translate it into something that might feel a little bit more exciting for you. If you are right across your numbers and it gives you the opportunity to either create more income or create more cash inside your bank account, this money is your money.


It’s money that you can do things with that you love. If you love to travel and you find a thousand dollars a month in your business and you might laughing, there’s not a thousand dollars inside my business going missing. You’d be surprised, often this happens even to people who don’t have big turnovers. Just not being in the detail, you can miss transactions, things can be incorrectly allocated, but whatever that number looks like, I really encourage you to think about translating that into something that you are passionate about. If you love to look good, if you love to get your hair done, and if you can’t tell me 30 bucks, but guess what? $30 a month across a year is $300 and I tell you what, that’s a hell of a lot of blowdrys. Think about it in terms of something that’s important to you. That might be a brand new, beautiful dress for you to wear, it might be a new pair of heels, it might be a weekend away with your family. So when the numbers bore you don’t think about the actual numbers themselves. Think about what money means to you. Why do you love money? What does money buy for you? Does it buy you freedom to buy clothes? Does it buy you holidays? Does it buy presents? Does it buy you being able to donate to causes that you really care about? Does it buy you helping out other people? Whatever money looks like to you, I want you to translate the boredom that you might have around money, into excitement, around what money can deliver for you. And I tell you what, it makes you want to learn to love your numbers more. So the second reason why you might not have the cash in your bank account that you really want is because you don’t know your numbers.


The key to creating strategies for your increasing cashflow


Now the third and final reason why you might not have as much money in your bank account as you’d hope that you would have is because you don’t have a strategy or strategies around how to create more money or more cashflow inside your business. It sounds like such a simplistic thing to say in theory, but in reality I can’t tell you how many business owners don’t actually have a really clear strategy around marketing or around how they are going to create more income inside their business. So if the numbers that you were looking at in steps one and two don’t excite you or they aren’t quite where you want them to be, the next thing to put in place is a strategy or plan around how to create more income inside your business. So firstly that looks like products, services that you offer, but also it looks like looking at your marketing strategy, what’s the game plan?


How are people going to find you? You can create all the products and services in the world, but if you haven’t got an audience of people and if you don’t have a plan of how you’re going to attract them, magnetize them towards your business, all the products and services in the world aren’t going to bring you more money if you aren’t selling them. If you don’t have a strategy around how to find your dream clients and then to bring them into your business and to help them find and then get excited about and then want to purchase your products and services. I definitely believe that having a strategy in place to bring more money into your business is imperative in creating more cash in your business bank account.


If you were listening to this and thinking I really want to lean in and learn more around numbers, learn how to manage cash flow inside your business. You are going to love what I have for you. I am running a free training which I’ve called Confident Cashflow and it’s all about how to create more cashflow inside your business. Now you can join via the link in the show notes for today’s episode and I will be running a live session, but what I’ll be doing is recording that live session, so even if you can’t come along, you’ll be able to watch the recording anytime that suits you. Basically what confident cashflow is about is I’m teaching you strategies to help you understand your cash flow and then how to make tweaks to change or improve your cash position. I would love for you to join Confident Cashflow. All the details are in the show notes for today’s episode.


Upleveling your knowledge around money and cash is one of the best things that you can do to create more money and more cashflow inside your business. So I strongly recommend you really invest the time in this space and to learn to love your numbers and to learn to love your money. As Brian Tracy says, “If you want to earn more, you’ve got to learn more”. I hope to see you at my free training. I hope you’ve enjoyed today’s episode and I cannot wait to chat to you guys again very soon. Have an awesome week.


Thank you so much for joining me today, if you enjoyed this episode, please make sure you subscribe to receive future episodes, and I’d be so grateful for a review on apple podcast! If you’d like a copy of the show notes or any of the links mentioned today, please jump over to clarewood.com.au/podcast and remember that Clare is spelled CLARE, have a wonderful week and look forward to chatting to you again soon!


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