The importance of cash flow to Independent Retail by Steve Denham of @betterretailing #IndieRetail

Business Link says ‘Cash is the oxygen that enables a business to survive and prosper and is the primary indicator of business health. While a business can survive for a short time without sales or profits, without cash it will die.’

Warning: Cash in a retail business, no matter how large or small, needs managing!

This is a definitive warning that cash in a business needs managing. For convenience retailers like me the biggest demand for cash is to pay our suppliers, whether at a cash and carry when we need to pay for the stock immediately for the stock we buy or some days later if wholesaler supplied. Without available cash we will find it difficult to obtain stock.

My wife and I run a village shop and offer a home newspaper delivery service so have some of our cash tied up in the credit we offer these customers.

The mechanics of cash flow, and the “states” of cash as it moves through the business

The cash flows through my business with rapacious ease, from customers to suppliers, staff, the government, our bank and of course some to ourselves as owners. Having enough of it as cash in our bank account to meet the weekly, monthly, quarterly or annual demand is of course what cash flow management is about.

Cash, comes in different forms, from cash on hand or in our bank account which is immediately available, in the form of stock or home news delivery book debt which is likely to  be returned to cash today, tomorrow, sometime in the future or maybe never.

We are fortuate to have a regular and fairly perdictable turnover and our buying patern reflects this. Our two major suppliers do ‘give’ us 10 days credit and demand a variable direct debit for payment. This means we know that each week our bank account needs suffient funds to cover these demands. To ensure that our bank account has the funds we bank daily through an in store ATM and with credit and debit card transactions.

When faced with challenges often a simple conversation will enable a reasonable resolution

The big challenge each year is of course paying our corporation tax; which for us falls due at the beginning of February. This year and last year we negotiated an extended payment period the HMRC that allowed us to spread the payment across six months to ease the pressure on cash flow. This does come with a cost of the interest that HMRC charge on the delayed amount and this year this is a little over £80.00 and that seems a small amount to ease this big annual charge.

I know how much cash we have on hand and what we have available in our bank account on a daily basis. I know that with a regular business we have similar weekly out goings and   we know we have funds to pay the monthly and quarterly bills as they come up. What is important to me is that by having the knowledge of our cash flow situation and managing when we make payments our business always live within it’s means.

This blog is thanks to Steve Denham of BetterRetailing. Steve Denham has worked in retail for more than 40 years. For more than half of his career he has run a village newsagent with his wife. He is interested in magazines, store development and local marketing, and is always looking to use  sales data to inform his range and display. Steve also takes a keen interest in the impact of government and legislation on his business, and will blog about all aspect of life at the coalface.

betterRetailing supports independent retailers with a site full of ideas and business opportunities from each other and selected trade partners. Site visitors read the blogs about every aspect of retailing which are updated daily, they also look at other retailers shops in the See My Shop picture galleries, have access to category advice and get the chance to ask questions of leading industry figures.


About Clare Bailey

Clare Bailey, The Retail Champion (formerly Clare Rayner), is one of the most well-known and respected retail experts in the UK. With unrivalled knowledge in retail, high streets and consumer matters, she offers unbiased, independent content – whether engaged as a professional speaker, for broadcast media, or for a written feature. Clare is a business woman, entrepreneur and founder of several small businesses. Having been born into a family of successful business owners, it was inevitable that she’d eventually jump off the corporate treadmill and step out on her own! Today her brand portfolio includes The Retail Champion, The Retail Conference, the Future High Street Summit and the Support for Independent Retail campaign. In addition, she is co-founder of Mobaro Retail UK and a non-exec director of Beed Virtual Assistant Services. Having started her career as a fast-track store management trainee for McDonalds, she went on to work with leading retailers such as M&S, Dixons and Argos. She moved swiftly into management roles before being headhunted into senior consulting roles with global software giant SAP, and international management consulting brand, Accenture. Her corporate background in senior retail, consulting and technology roles, coupled with her experience of creating and running her own business, has enabled her to be equally capable whether consulting to global brands or micro businesses. This unique blend has not only positioned her as a leading expert in all things retail, but has enabled her to add meaningful commentary and insight to the debate around the future of the high street, and, how technology is driving fundamental change in the way consumers, and businesses, interact. Clare has become an influential voice in her field, which has resulted in her becoming a regular media contributor and sought-after conference speaker. Often seen on Good Morning Britain, BBC Breakfast, Sky News, and Chanel 5 (to name a few), Clare speaks on a myriad of retail, high street and consumer issues – but is particular adept when it comes to explaining the context behind retail trading results, newly released data, and government stats, in a palatable and informative manner. In addition to broadcast and conference speaking, Clare is the proud author of two best-selling business books published by Kogan Page - The Retail Champion: 10 Steps to Retail Success, published July 2012 and How to Sell to Retail: The Secrets of Getting Your Product to Market, published February 2013. She has provided contributions to various academic texts, including Retail Marketing Management (published by Pearson). With an engaging, conversational yet informative style, Clare writes for press and content agencies, providing features, articles, blogs and opinion pieces as well as contributions to white papers and reports. However, when the situation demands a more serious style, Clare can deliver - In 2016 she wrote an extensive report for a major insurance and risk law firm, as a retail expert witness, to support a public liability suit. She found that project particularly enjoyable as it played well to her strengths – assimilating large amounts of data and information, identifying the key points and articulating that in an understandable manner. When not on TV or speaking at conferences, Clare’s “day job” sees her supporting consumer-facing businesses through her consultancy services. When asked to describe what she most loves about retail consulting it is typically the opportunity to “dig deep”, getting “under the bonnet”, in order to leverage the business data to uncover the insights that lead to “lightbulb moments”. She also loves working on business change programmes that centre on improving the processes and systems to increase profitability by supporting more rapid, better informed decision making, improving the customer experience, or simply by become more efficient and streamlined. In this respect she considers herself a “business engineer” with a brain that works like a relational database! Due to her years of experience, her logical, objective approach, her quick, rational thinking, she is known for being able to cut through complexity, seeing right through to the crux of issues, finding creative solutions that others may have overlooked. As if all that wasn’t enough, Clare is a working mum, juggling a home life in rural Lincolnshire with her partner, their 5 kids, 4 cats, and geriatric Labrador! For all enquiries, contact Clare directly on 01727 238890 or email
This entry was posted in Blog-a-day for Indie Retail, Independent Retailer Month 2011, robust repeatable processes, saleable business, The Retail Champion and tagged . Bookmark the permalink.

One Response to The importance of cash flow to Independent Retail by Steve Denham of @betterretailing #IndieRetail

  1. Pingback: A preview of first 7 blogs for blog-a-day for #IndieRetail | Clare Rayner: The Retail Champion

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