5 Simple Ways to Fix Your Cash Flow

In the part one of writing about cash flow, we looked at the meaning and why negative cash flow is dangerous to your business even though you are making sales, every day. In this article, we’ll learn how you can fix your cash flow.

The truth is, fixing your cash flow doesn’t have to be hard. It’s about being intentional with how money enters and leaves your business on a daily basis.

5 Simple Steps to Fix Your Cash Flow:

1. Always Ensure You Get Paid Faster

Primarily, you are in business to make profit, hence the reason you should stop being the microfinance bank for your customers. Too many businesses, especially student entrepreneurs, run on trust-based credit. If you want to see your business grow exponentially then you must put in place systems that enable your customers to pay you once they make a purchase from you.

How would you deliver a product today, but your customers promise to pay “later.?” Before you know it, your cash is tied up in “I Owe You (IOYs). Even if you are going to sell on credit, let there be a repayment system to get your money back.

What to do instead:

• Set clear payment rules (full payment before delivery or at least a 50% deposit).
• Offer incentives for early payment (e.g., small discounts).
• If you must give credit, limit it to trusted, repeat customers and cap the amount.

2. Separate Business Money from Personal Money

By observation, there are business owners who don’t have a business account for their business. Even when they do, there are not discipline enough to not mix it with their personal account.

This one mistake kills a lot of Nigerian SMEs. You make ₦100,000 in sales, but before you know it, ₦40,000 is gone for personal expenses; school fees, food, even a weekend outing.

What to do instead:

• Open a dedicated business account (even a simple mobile money wallet like Moniepoint works).
• Pay yourself a set salary from profits instead of dipping into business cash anytime.

3. Track Every Kobo

You can’t fix what you don’t measure. Many entrepreneurs know their sales numbers but not their profit or expenses.

What to do instead:

• Keep a simple record of all money coming in and going out (Google Sheets or even a notebook works).
• At the end of each week, check: “Did more cash enter my business than leave?”
• If not, identify which expenses can be cut or reduced.

4. Build a Cash Buffer

Even small businesses need an emergency cushion. To do that effectively, aim to save at least one week’s worth of expenses so if sales slow down, you’re not panicking or borrowing.

5. Don’t Grow Too Fast

It’s tempting to expand quickly when sales are up (new locations, more stock, fancy branding). But if your cash flow can’t sustain that growth, the expansion can kill you faster than stagnation.
Grow steadily, reinvesting profits, and ensure your cash reserves match your ambition.

Conclusion

Sales make you feel good, but cash flow keeps your business alive. If you’re making plenty of sales but still struggling to pay bills, restock, or grow, your problem isn’t sales, it’s cash flow.

By tracking where your money goes, getting paid faster, separating your accounts, and building a small cash buffer, you can protect your business from being one of those that “look busy” but quietly close down.

At the end of the day, sales numbers might impress your followers, but cash flow is what keeps your doors open and your business truly thriving.