Cash flow is the lifeblood of a business. Poor cash management is probably the most frequent stumbling block
for entrepreneurs; especially those that are in the creative fields. Understanding the basic concepts of cash flow will
plan for the unforeseen eventualities that nearly every business faces.
A profitable business can run out of
money. Being profitable is not the same as maintaining liquidity, yet both
aspects of business finance are essential to your business's success.
You say you can't afford to ____ (fill in the blank).
Are you sure? Do you have a business plan? Do you have an operating
budget? Do you have a capital expenditures budget? How quickly do you
get paid for a sale? How quickly do you pay your vendors? Are your
vendors giving you the best rate possible? Are you charging for every
service you offer? Are your rates high enough or too high? How much does
it cost to make a dollar? What is your gross profit margin? How much of
each dollar that you make do you get to keep? What's the biggest form
of revenue you have? What cost the most to sell? What's the easiest
thing to sell? What's your biggest liability? What's your biggest asset? Are you worried that you'll run out of cash?
If you need help answering these questions, you many
need to call Studio Consulting Group.