We cannot finance daily business operations without positive cash flow. We cannot market our company if we dont have money, and we dont have money if we dont have positive cash flow.
As an entrepreneur you must use tools such as cash flow analysis to discover where the money of your small business is spending, what you will need to improve, and how you will improve to make your comapny to be more cash stable company.
Why an entrepreneur must love cash for his company? Can his company survive on the market without positive cash flow?
Here are some of the possible answers on this question.
1. With Positive Cash Flow Entrepreneurs Can Grow Their Company
Growing the business is directly related with the quantity of the money that specific company currently have. Without the money, your company can’t grow on other markets, can’t expand the assortment of products, can’t expand the number of employees… And now the question is how entrepreneurs can grow their businesses if they cant expand on additional markets, can’t build additional products or can’t employ additional employees.
2. With Positive Cash Flow Entrepreneurs Can Test Different Ideas
The entrepreneurial characteristic is to have more and more business ideas in order to ensure that the company is on the right way. However, for each idea to be implemented it require human resources. Also, the implementation will require additional material and financial resources. All of these investments will adequately require more money from the company.
3. With Positive Cash Flow Entrepreneurs Can Finance Their Mistakes
Entrepreneurs cannot expect that they will always win or succeed in everything that they will start doing. Running a small business means experimenting and testing different things in order to find the best possible solution. In such a way some ideas will succeed, but someone will fail. With enough money in cash your company can finance such a mistakes without some additional disruptions on current business operations.
4. With Positive Cash Flow Entrepreneurs Can Invest in New Products Development
The development of new products simply menas growth of the company, but also it require additional money that will need to be spend on different activities such a research and development, prototyping, testing…
How entrepreneurs can develop new products if they don’t have money to invest in such activities.
5. With Positive Cash Flow Entrepreneurs Can Make Their Life Much Better
More money in company means more easier entrepreneurial life and more personal money with which they can improve their personal life. That’s the fact.