Understanding Cash Flow for Your Digital Marketing Agency
Cash flow is the amount of money your company receives from clients and owes back to them. It’s also important to note that cash flow does not necessarily mean profit in and of itself; it may be defined as when you’re paid by customers and when you must pay bills. The net change in a company’s cash position from one period to the next.
Cash Flow Indicates Your Agency’s Success
If you take in more money than you pay out, you have a good cash flow. If your bills exceed your income, you have a negative cash flow. Cash flow is one of the most important indicators of an agency’s success.
There are a few reasons why cash flow is so important for marketing agencies. First, most agencies operate on a project basis. This means that they are constantly starting and stopping work as new projects come in and old ones wrap up. This ebb and flow can be tough to manage from a financial standpoint, especially if an agency is relying on a single source of income.
Constant Leads for your Agency and Closing Sales
This is why having constant leads coming in and sales closing is an important factor in maintaining a positive cash flow. If your agency only has a few clients and they all decide to cancel their contracts at the same time, you don’t want to be left without income. On the other hand, if you have a steady stream of new business coming in, you can weather any storm.
If you want to see how we help agencies grow by implementing systems and structures to keep lead flow high and keep sales conversations going. The Done For You Agency Program is key to unlock the areas where you’ve felt stuck!
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