Cash flow really is king!

Cash flow really is king!

The question that’s going through many business owners’ minds right now is, how do I never feel this vulnerable ever again? What we are going through now, has the potential to happen again. So, what businesses must do now, more than ever before, is eliminate that vulnerability as best they can.

I have no idea what the exact number is, but according to statistics from years of data, well over 80% of businesses fail in the first five years and as a result, far too many fundamentally run week to week. There’s just enough cash coming in to pay the bills, the wages and pay themselves a little, but that’s it, no potential for growth, investment, ongoing marketing and long-term security. What’s also been identified over the last two months is the incredibly high number of businesses that in fact are constantly running insolvent. They don’t even have enough cash coming in to pay the bills from the previous month.

The starting point is planning, what is it that you want; and it’s there, that most fail, simply because there’s no real strategy. The end point is the result, the objective, the goal. What is it that you want to achieve from this business? Whether it’s lifestyle, property, investment, a big business or just cash, whatever it is at some point any business needs to plan and strategise how they’ll do that.

The fact that possibly up to 90% of businesses don’t think like that, don’t plan at all, and simply run their business week to week, makes you realise how vulnerable the majority of businesses (and their employees) are and maybe it’s time to rethink how that works.

I sent out a post last and asked people what they thought would be the first thing businesses would focus on, when the go button is pushed again. There was a variety of answers as I expected, including putting more attention into marketing, looking after their clients better, making sure that their staff had the skills to do what was needed, but not one mention of cashflow; and it’s king! Without cashflow and cash reserves, businesses are vulnerable, not just from what we’re going through now, but many aspects that could easily hold a business to ransom almost every day of the week.

The secret is to plan better, have a clear understanding of what you want and how to get it. It actually isn’t complicated, but if you’re not focused on it, it simply won’t happen and businesses will continue to be in a position of ongoing cashflow shortages.

Just because a business has a great product, doesn’t guarantee success, nor does the best marketing plan. If you can’t convert the results will be poor.

I learnt a long time ago, that reverse engineering the cashflow, or the result wanted is the secret. Or as Stephen Covey wrote in the seven habits of highly effective people, “start with the end in mind”, but it needs to go one step further. You need to include everything that’s going to be needed to get the business to the point it’s needed. Sure, it won’t happen all at once, but a plan is a good start. If you’ve got a business objective and that includes business growth, then what’s needed for that to happen? That could include advertising, marketing, staff or even a new location. But if you don’t add that

into the plan, and you simply stick with what the business is doing now, chances are it wont get there.

If there’s one thing that’s come out of the last couple of months, it’s cashflow and cash reserves, (or cash in general) is king. There are alternative payment methods including barter, but if there’s not a constant strong cash flow, any business will come to a grinding halt quickly, as we’ve seen.

The solution to ensuring that a business does everything humanly possible to eliminate every potential threat and vulnerability, is simply plan for a stronger and growing cashflow. Running a business week to week, like far too many do, can’t and won’t work long time.

Mybusinessnow has developed the most straight forward and common-sense business growth program out, that’s quick, easy and simple and if followed, attracts and retains more clients, plus also develops a strong and growing cash flow and cash reserves.

We will be running a series events built around improving the fundamentals of business growth, including cashflow starting in May, checkout our website, or Eventbrite page for details for either our (hopefully) live or online workshops. https://www.eventbrite.com.au/o/mybusinessnow-18507118283