What Is Cash Flow In Small Business?

Welcome/Thanks for coming back to blog #2 in the series.

What is cash flow?

Cash flow: The amount of money moving into and out of a business.

The cash flow of your business is a measure of the amount of cash that enters and leaves your organization over a specific period of time. In a positive cash flow environment, you have more cash coming into your business than is leaving it. This enables you to pay your bills and pay for other expenses as well. If your cash flow is negative, you will be unable to make those payments. The concept of having “enough money to meet your financial obligations” is also known as working capital.

Why is Cash Flow so important?

The primary objective of every business is to achieve a healthy balance between their expenditures and their incomes. However, more sales do not necessarily translate into more cash. During a period of rapid growth, many businesses may mistakenly believe that large numbers of orders are sufficient, but if they cannot pay their overhead until invoices are cleared, this can lead to problems. An effective cash flow management strategy can distinguish between success and failure in the business world. Despite the simple definition of Cash Flow in the dictionary, so many businesses of all sizes fail to manage their cash flow effectively each year.

Do you want to be a statistic? Let’s work together to make it a successful one. 

A study conducted by the US bank finds that the overwhelming majority of small businesses, 82% to be exact, fail due to problems with cash flow. As a result of their study, they found that poor management of cash flow or an inadequate understanding of cash flow contributed to the failure of 82% of small businesses. It means that the business might have successfully achieved product-market fit, and been growing and servicing customers, and then all of a sudden, it ran out of funds which could result in payments not being able to be paid and deadlines not being met. Sadly, the next thing you know, the business has closed its doors. There is no end to the staggering statistics. In the United Kingdom, over 50,000 businesses fail each year, and the Australian Bureau of Statistics reports that 60% of small businesses fail within their first three years. Poor cash flow is one of the main contributing factors to this failure. The challenge, however, resides in implementing an effective cash management strategy that can assist businesses in overcoming this issue.

In addition to being a well-known and successful business financial specialist, Cash Flow Mike has developed powerful on-demand and in-person training programs to allow owners to conquer their cash flow in order to prevent their business from becoming the next statistic. 

In the early stages of a business, or even in an established business, managing one’s cash flow can make or break the success of the venture. Mike’s expertise in cash flow management has made him the ideal person to consult if you are unsure whether you have cash flow problems. In addition, he can help you to discuss strategies for creating sustainable growth. With Cash Flow Mike as your guide, you will be provided with insights on how to manage cash flow effectively. It is a proven executive, whose in-depth training course will help modernize business decision-making by linking business goals to key cash metrics. With Cash Flow Mikes’ extensive experience transforming the workforce of Fortune 500 companies and start-ups to maximize cash flow, he has developed breakthrough methods and ideas to maximize cash flow and is committed to assisting your business, by providing you with tools they can implement immediately to make a real difference in their business. 

P.S. Whenever you’re ready… here are 4 ways Mike can help you improve the Cash Flow in your business.

  1. Grab a free copy of my book:

In The 7 Minute Conversation, you’ll learn how to analyze any company’s financial statements in 7 minutes or less. It includes a super valuable lesson on controlling expenses. — Download Here.

  • Join the Clear Path To Cash – Mining Your Business For Hidden Cash Facebook Community:

This is our new Facebook community where business owners who are using the concepts taught in The Clear Path To Cash can share lessons learned and receive advice from my team and other members of the community. — Join Our Facebook Group.

  • Participate in a Live Virtual Clear Path To Cash Seminar:

There are some people who prefer to learn concepts through self-study through books or video series.  For others, such as myself, it is necessary to be in a classroom environment and to be guided through the concept.  We offer a Virtual Seminar each month.  It takes only three hours each day for two days, during which you will learn about The Clear Path to Cash Program’s eight steps. 

I am so passionate about this one that I teach it myself. — Virtual Seminar.

  • Work with me and my team privately:

If you’d like to go over something outside of a group setting, no problem.  All you have to do is click this link to schedule a 15-minute Triage Call. In 15 minutes, we see if my team can help you with your problem.  Sometimes we can give you some advice on the spot, other times we will invite you to a longer Burning Issues call, where we dig into the issue a little deeper and give you some great advice.  Even if we don’t believe our program is a good fit for you, we try to connect you with the right professional from our network of friends. —  Schedule Your Triage Call.