The importance of cash flow: Running a business isn’t always about making a profit. The main concern for any business first and foremost is generating cash.
COULMN:
So, you own your own business and things are going pretty well. The economy is trending upward and sales are starting to normalize, even gaining some momentum after a long and painful economic recovery. You are even considering expanding to a new location, increasing inventory or adding new bays. But what if you don’t have the cash to expand? Can you get a loan?
No problem, you think to yourself. So you visit your local banker. After all, you make a profit every month, so he is sure to loan you that extra $200,000 that you need, isn’t he?
Maybe the banker will loan you the money you need. Maybe he won’t. Just making a profit every month does not guarantee that he will write you a check!
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Financial checks and balances | 2014-11-07 | Modern Tire Dealer