Why Cash-Flow Out Ranks Profit

Why Cash-Flow Out Ranks ProfitSmart Support recognises the primacy of positive cash flow and firmly believes that it is vital for business survival and growth.

  • A change in your turnover (even a slight one)
  • An increase in your prices
  • A decrease in your prices
  • A change in inventory levels
  • Taking on a new salesperson or any new employee. Or indeed letting one go.
  • A change in your receivables or your payables (how quickly you get paid from your customers or pay your suppliers).
  • Reducing your overheads
  • Increasing your borrowings

Do you just carry out changes and assume/hope that they will be beneficial? Do you just try and increase your sales and assume/hope that this will be good for business? Whilst it normally is good for business, surprisingly, and sadly, often it isn't. It can cause a myriad of problems such as more work, increased overheads, cash flow problems, operational or production issues.

It is always better to model the changes before you carry them out to see what the impact will be on your business and, indeed, your life. The unfortunate fact is that cliches are sometimes correct. Turnover is vanity, profit is sanity, cash flow is reality.

Smart Support has years of experience in helping business owners understand how the cash really flows – or doesn't - and your local Smart Support advisor would be pleased to offer you a complimentary assessment of the current financial health of your business.

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