Cashflow Tips and Cashflow Worksheet Tool
Cash Flow – The Lifeblood of Your Business
Over the years, we have seen many franchisees perform very well, while others have struggled to meet financial obligations. In some isolated cases, there have also been instances of poor financial discipline around banking and cash handling.
Most businesses experience cash flow challenges from time to time. However, given the nature of the Kiwikrane model—where income is collected regularly and many expenses are proportional to revenue—cash flow issues should generally be manageable.
That said, cash flow problems can arise during periods of sudden and unexpected revenue decline, or more commonly, due to financial planning and management practices.
Common Causes of Cash Flow Issues
1. Drawing too much for personal use
Taking more out of the business than it can sustainably support.
Solution:
- Increase business turnover
- Reduce personal expenses
- Supplement with additional income if required
- Align withdrawals with what the business can realistically afford (note: in many cases, this is a part-time income)
2. Repaying loan principal too aggressively
Overcommitting to loan repayments can restrict available cash.
Solution:
- Renegotiate with lenders for lower regular repayments
- Make additional lump sum payments when cash flow allows
- Where possible, structure repayments weekly rather than monthly to smooth cash flow
3. Not planning for tax obligations
Unexpected tax bills can place significant strain on cash flow.
Solution:
- Set aside funds weekly into a separate account specifically for tax
Payment Priorities
To maintain financial stability, payments should be prioritised in the following order:
- Current suppliers (monthly or fortnightly)
- If you order it, you should pay for it on time
- Long-term loans (at minimum agreed repayment levels)
- Tax savings account
- Personal drawings (living expenses)
- Investment in new machines
- Where growth opportunities exist, reinvesting in machines often provides better returns than accelerating loan repayments
- Additional lump sum loan repayments
Financial Discipline and Planning
Strong financial management is critical to long-term success. Many business owners only recognise a cash flow issue when funds are already depleted.
To avoid this, we strongly recommend maintaining a cash flow forecast. By tracking expected income and upcoming expenses—and updating it weekly—you can make informed decisions and stay ahead of potential shortfalls.
If you need assistance, please contact the Support Office. We are available to help you set up and tailor the below cash flow spreadsheet to suit your business.