Growing a business puts a huge strain on cash and that makes Cash Flow one of the most critical components of success for any business. Without cash, profits are meaningless.
In this session of June’s edition of The Spark Ignite Series – Harnessing Value from Assets, we had Tale Alimi and Omowunmi Rhoda Charles talk about Cash Flow Management in Business. They emphasised greatly on the importance of Cashflow in business, and how imperative it is for every business owner to get in control of this asset from the get-go.
Many a profitable business on paper has ended up in bankruptcy because the amount of cash coming in doesn’t compare with the amount of cash going out. Firms that don’t exercise good cash management may not be able to make the investments needed to compete, or they may have to pay more to borrow money to function.
According to Tale, As a business owner, you have to first and foremost treat the business as a separate legal entity that is independent of personal affiliations. She emphasized that that mindset will help one remain disciplined when it comes to money management.
Furthermore, Omowunmi shared that one of the most crucial aspects in getting in control of ones finance is making Cash Flow projections from the very beginning so it can be balanced with proper planning and the best way to do this is to always work with the worst-case scenario when making these projections.
Watch the video above.