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The importance of cash in a business
We’ve all heard the saying revenue is vanity, profit is sanity, and cash is king, and it couldn’t be more true than in today’s climate.
But here’s the thing, it’s not just as simple as cash is king.
I was reading an article the other day, and it drew a parallel between how cash in your business is like oxygen in Maslow’s hierarchy of needs. And it’s so true. The reality is, as humans, we can only live a couple of minutes without oxygen, and our businesses, a business starved of cash cannot live very long.
So, what’s the key form that cash comes in?
If you’re not out there hustling for sales right now, and you don’t have a clear strategy to bring more sales into your business, you’re starving your business of cash.
- Financing Options.
This could be an overdraft, it could be a short-term loan, it could be borrowing off friends or family. Capital injected into your business.
- Asset Liquidation.
I know people who have been selling vehicles or furniture they’re not using. They’re downsizing what they need. They’re selling things off to bring cash in the door.
These are just three quick ways that you can generate cash. But the primary way you want to focus on, is to get out there and sell. I remember hearing a quote years ago at a seminar I attended.
“There’s nothing more sales won’t fix in a business.”
This is so true. If you don’t have a clear strategy to market your products or services right now, and a clear sales strategy where you need to adapt your language right now to the current climate to help people make a buying decision, you will starve your business of cash. And no matter what happens, no matter what government stimulus there is, your business will die because it can only last a short period of time without cash.
If you need some help with this, we obviously, we developed a tool. If you go to 90daycashflow.com, you can download our super-fast cash flow tool, and you can quickly put together a cash flow forecast for yourself and your business to help you understand:
- Cash exiting your business
- How to put a strategy in play in place to bring cash into your business.