Why a healthy cash flow is the secret to a successful agency
Business services is fast-paced, dynamic and competitive. But being busy isn’t enough. Whatever field your agency operates in, evidence of your success lies in your company’s bank balance, as much as in the volume of work you’re tackling. Having lots of projects on the go and more in the pipeline is well and good. But if you’re not getting paid on time your business isn’t truly healthy - or ready to grow and exploit new opportunities.
The nature of the work many agencies undertake can exacerbate issues with cash flow. Projects often take some time to complete and can prove elastic, with clients requesting unexpected last minute changes. Plus, larger client firms might insist on long payment terms, leaving an agency waiting for money for months after work has been delivered.
It doesn’t have to be this way. There are several paths to improving your business’s liquidity. What exactly should an ambitious agency owner be doing to ensure they have a healthy cash flow? And how can they use that strengthened position to scale their company up?