Cash flow. To stay in business, you've got to keep a steady stream moving through your company.
During a consultation with one of my clients this week, he proudly stated, “Greg, I ran the numbers yesterday. I've got enough business to keep us busy until February. " Later the same day, I spoke with a prospect who told me that more than half of his current projects were ending and he needed to “start beating the bushes for more business. " If both continue down the same path, which one do you think will be the most successful?
My client has been very busy over the last few months taking action so he would have business long into the future. Unfortunately, the second owner is typical of many business owners today. Complacency when things are going well can be an absolute killer. I learned this the hard way many years ago when we bankers were just learning how to sell. Up until that time, we had been order takers and we didn't like prospecting, marketing and selling too much. We avoided it whenever we could. So when things were going along pretty good, we got comfortable, we got complacent and eventually we ran headlong into a barren desert that used to be our sales pipeline. When that happened it was painful and I don't like seeing that happen to others when I know how it can be avoided.
Unfortunately, as human beings we tend to run away from pain much harder and much faster than we will run toward pleasure. We have to recognize that weakness and compensate for it.
To survive in business, you must always keep your finger on the cash flow pulse. Many business owners I know are so focused on sales and profits that they forget that profits don’t pay the bills…cash does. Some of the most cash flow challenged companies in the world are those that are growing the fastest.
Make sure that cash flow management has dedicated space on your calendar every single week.
And remember, cash flow management is not an event. It's an ongoing process that requires regular action. It requires a plan, constant attention, and dedication. Complacency and procrastination can kill you.
Greg Beverly, CPA, MBA has more than 21 years experience helping business owners to manage cash flow for success. You can visit his website at http://www.cashflow.yougethelp.com to learn how you can generate more cash in your business.