Cash flow is the net change in your notary business cash position from one period to the next. When you have more cash than you send out, you have a positive cash flow. You have a negative cash flow if you have more cash outflow than inflow. Having a positive monthly cash flow is a key indicator of your notary business financial health.
Having a positive cash flow is critical to running an efficient effective business. To establish a positive cash flow for your notary business there are a couple of key factors that you have to keep in mind. Below are just a few key factors to keep in mind and habits to develop as you continuously develop your business empire.
- Know what your bottom line is. This is absolutely key to your success. You have to know how much it cost you to produce your product or service. This includes maintaining your vehicle and the internet, paper, ink, gas, insurance (including business, life, disability, identity theft), etc.
- Make cash flow a priority. Track what you are currently spending your money on. For the next 30 days journal your spending. If you never tracked what your daily expenses are to this point then this will be an eye opening experience for you.
- Ask for direct deposit instead of having a check mailed(which is usually mailed on average about 45 days after the assignment). If your existing clients are not doing this currently ask them to start for you. It is an extremely simple process and most businesses have picked up this practice.
- Develop a system to make deposits quicker. Most banks will allow their business customers to deposit checks through their banking apps that can be downloaded on your cell phone. When conducting mobile notary assignments and you are collecting a check as payment this download feature makes it almost as safe as collecting cash for the assignment. It also puts your cash in the bank faster.
- Diversify your notary business. Make sure you are not just conducting real estate assignments or just conducting mobile notary assignments. Doing a mixture of both will keep your business finances health.
- Properly vet your clients. Prior to accepting assignments from companies do your research on them. Ask questions about their methods of payments and when they pay after each assignment. As a business owner this is basic information you need to know to run your business more effectively.
- Be aware of daily inflation and adjust to it. For Notary Signing Agents, this is a critical point to keep in mind with negotiating your next contract. Inflation measured by consumer price index is defined as the change in the prices of a basket of goods and services that are typically purchased by specific groups of households. Daily Inflation Index includes the prices of foods, gas, paper, ink and other supplies that notaries needs.
The reason why this should be is so important to the Notary Signing Agents (NSA) is in this example. Let's say you accepted an closing assignment on June 1st for $100. Upon completing the assignment it pays you the NSA 45 days later on July 15th. Accounting for the Daily Inflation Index here is just one example on how this affects the $100 the NSA is to receive for the assignment.
June 1st price of a gallon of gas is $2.25 per gallon
because gas prices fluctuate daily by
July 15th the price of a gallon of gas is now $3.49 per gallon
In this example if the NSA car has a 15 gallon gas tank the NSA will lose $18.60 just on filling up their vehicle with gas. The $100 is now worth $81.60. This is just one product example of how the Daily Inflation Index can affect an NSA's business. Buying fresh product is another example of how this works because fresh produce prices can double or even triple overnight.
Developing a more efficient at developing positive cash flow habits doesn't happen overnight but it is possible. Believe in yourself and know that it can be done.
Daniel C. Lewis resides in Carmel, IN. He was named in 2010 Notary of the Year by the National Notary Association. He was also named in the same year an Honorary Secretary of State by the Indiana Secretary of State. Daniel is currently serving as President of the Indiana Notary Association. Daniel is an entrepreneur, writer, video editor and Managing Partner of Lewis Notary Services Inc. Daniel is also a licensed Financial Advisor and specializes in helping notary entrepreneur with retirement planning. If you wish to receive assistance with your business plan and receive a FREE financial review click here