The post-pandemic world presents numerous opportunities for entrepreneurs to succeed – but it’s no secret that many challenges still abound. A crucial pitfall faced by many businesses is lack of cash flow — 82% of businesses cite cash flow problems as a significant factor in their failure.
Early in my career in financial services at a large Canadian bank, I got to work with many small to medium-sized businesses (SMBs). It was eye-opening to see the sheer number of businesses that operated with such thin margins that something as simple as a slight delay in receiving a payment from a customer could jeopardize their survival as a business.
After leaving the bank to pursue an entrepreneurial path, the pain of managing financial operations became personal. As one of the owners and operators, I was solely responsible for managing all aspects of our cash. This included invoicing, collecting payments, managing expenses, and ensuring that employees and suppliers were paid on time. This manual approach was not only time-consuming but also prone to errors, leading to delayed payments and disrupted cash flow. More importantly, it chipped away crucial hours that I could have spent on growing our business. This taught me an important lesson: staying on top of our cash flow wasn’t just an operational task, but an imperative to growing our company and achieving our goals.
Times may have changed but the fundamentals remain the same. With high inflation and rising cost of capital, cash on hand makes the difference between failure and growth. An unpaid invoice or delays in receiving payments can quickly snowball into bigger issues. For business owners who want to grow confidently in 2024, automating financial processes, starting with Accounts Payable and Receivable, is the best way to address inefficiencies and gain visibility into their cash position. Payment automation solutions accurately display where each dollar goes and when to expect a cash influx. This insight unlocks the ability to forecast more accurately, invest in R&D, and know when to hire.
My advice for budding entrepreneurs is to not neglect this critical foundation and to invest in building efficient financial processes from the start. It’s not just about saving time and money, it’s about realizing your full potential as an entrepreneur.
Hamed Abbasi
Co-founder & CEO, Plooto
Hamed Abbasi, Co-founder and CEO of Plooto, spearheads a dynamic team delivering a leading payment automation solution for small-to-midsize businesses. Previously, he co-founded Vast Studios, a gaming company, leading to its acquisition in 2014. Hamed’s strategic leadership expanded Vast Studios globally. Now focused on Plooto, he is committed to making financial growth attainable to all businesses by unlocking the power of seamless cash management.
