10 Are you risking business failure?


Business owners understand that financial management is important for business success.  Many focus on sales and profits, but even profitable businesses can fail.  What too often gets overlooked are the mundane but critically important, boring, operational maintenance processes. What too often gets overlooked is cash flow.

The lifeblood of every business is cash flow, Cash Flow, CASH FLOW!  Yet,

82% of small businesses fail because of poor cash flow management skills Ty Kiisel for SCORE

Sometimes it is easier to understand on a personal level.  Let’s say you lent your favorite Uncle Leon ten grand.  He’s always been good for it.  But, if the end of your money came before the end of the month and you have to pay for a thousand-dollar auto repair so you can get to work next week, it doesn’t matter how much money Uncle Leon owes you, you need cash in your hands NOW!  Let’s hope Uncle Leon can loan you a car until payday!  Business isn’t always so flexible.

More than one small company has gone under working with what they imagined was their dream client. When they landed the contract with the Fortune 500 company, they thought they were set for life. It didn’t take long to realize that it would take months of red tape to get payment. During those months of waiting, they still had to pay for the goods and services they provided to the behemoth and pay their bills. On paper, they were incredibly profitable. In life, they filed for bankruptcy.

In an article authored by entrepreneur Tim Berry on Entrepreneur.com, he shares: “One of the toughest years my company had was when we doubled sales and almost went broke. We were building things two months in advance and getting the money from sales six months late. Add growth to that and it can be like a Trojan horse, hiding a problem inside a solution.

…one key is relevant to all small businesses regardless of size or industry:  If your expenses exceed your cash, then you have a cash flow problem.  Preferred CFO

Cash flow is only one of the financial management skills owners often overlook as they focus on their core business.  But it is also the very reason that the majority of failed businesses failed.  Don’t let it happen to you.

Quader Books can greatly reduce the time and effort required to manage cash flow. We provide full bookkeeping services and accurate monthly financial reporting so you can focus on the 20% of activities that produce 80% of your revenue. This keeps owners in the “success zone” ensuring that they avoid the pitfalls that can halt an otherwise healthy revenue growth pattern.

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