For those who have recently started their own business, one of the main challenges is likely to be cash flow which is affected by so many areas of the business.

How much you sell, how quickly you collect the money, factoring your invoices and how high your expenses are are all directly related to cash flow as is the overdraft facility from the bank and if you fail to pay attention to any of these areas then you could find yourself in deep waters very quickly indeed.

Many start ups fail to produce an in depth business plan and estimations on sales and income are often guessed at with little proper research. By skipping over this vital part it leaves the business very vulnerable if any of the projections are wide off the mark.

If you find yourself with cash flow problems there are several actions you can take and all is not yet lost. If it is a genuinely temporary cash flow problem you could try to ask the bank for additional funding for a short period.

They will only grant this if they can see that there are no long term problems with the business such as if sales are far lower than previously predicted or if expenses are far exceeding profit. Interest rates may also be high this way so it is not a long term solution.