The most important number in your business

You can’t find the most important number in your business on your profit and loss statement (P&L).

Now, don’t fire your bookkeeper yet, because it isn’t his or her fault.

A P&L shows you how profitable your company is, meaning how much more (or less) revenue your business raised than expenses it incurred.

But profits don’t pay bills. Profits don’t pay salaries.

Cash does.

Cash flow is the most important key performance indicator (KPI) in any business.

Cash flow for a company is like blood flow for a body. A business that regularly loses cash won’t last long.

Profitability is important, no doubt. Profits should be fueling most (if not all) of the cash inflow for your business.

But without managing cash outflows also, it’s possible you still run into trouble. Every day, profitable companies go broke because they’re too cash poor to continue operating.

That’s why my first priority for any business owner is ensuring positive cash flow.

So let me know…

How do you currently manage your agency’s cash flow?

What challenges do you face in managing your agency’s cash flow?

In your experience, what are some of the consequences of not managing cash flow well, and how have you addressed them in your business?

Hit REPLY and tell me about it!