Profitability Does Not Necessarily Mean Good Cash Flow
Cash flow is not the same as profitability. A profitable business can still be unable to pay its bills. Similarly, just because a business is meeting all of its financial obligations, doesn't mean it's profitable. Profit is an accounting term, which really only exists on paper. Measuring profit is a very specific way of looking at a business. It doesn't tell you a whole lot about how the business is getting by day-to-day. Improving cash flow is a smart move for any business. It doesn’t matter how great your business model is, how profitable you are, or how many investors you have lined up. You won’t survive if you can't manage your company's cash. In fact, one study found that 82% of businesses fail due to poor cash flow management skills. If you're looking for one area to focus on that will have a dramatic impact on your business, this is it. Getting good at managing cash flow is one of the best things you can do for your business. Not only that, it's a sk...