Cash is more important than profit.
Even a profitable company can struggle without generating sufficient cash flow. I worked with a highly successful residential plumbing company for several years- who doesn’t need plumbing? Clients must be falling out of the sky, right?
But there was a problem: the firm had taken on a huge commercial plumbing project, and the firm had lost money on the client. It was so much money (and lost cash) that the firm struggled to make payroll each month. Eventually, the owner brought in a partner, who invested the cash needed to operate each month.
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Businesses have to forecast and monitor cash- it’s more important than profit.
Continue reading The 13 Most Interesting Facts In Business
I like to refer to my son as a “hit and run” cook, because he makes a big meal and leaves a huge mess. He means well- and the food’s good- but the process isn’t well organized.
I see a lot of entrepreneurs who use this same approach, because some of them seem to be driving 70 miles an hour in a 30 MPH zone. These people have an idea, they’re in a hurry (because it’s a billion dollar idea) and they don’t think about the business carefully.
Thinking is hard.
Continue reading Why Do So Many Young Entrepreneurs Think Their Ideas Are Worth Billions?