Let The Cash Flow In!
For small to medium size business owners, understanding cash flow can literally be the difference between survival and failure. In fact, allBusiness.com listed cash flow problems among the top 10 reasons why small to medium enterprises (SMEâ€™s) fail.
Daryl Turko, owner of The Interface Financial Group (IFG) in Calgary, points out most people believe cash flow problems occur in businesses with slow sales, but rapid growth can also trigger a cash deficit.
â€œThere is a difference between profit and cash flow that business owners should understand,â€ Turko said. â€œEven businesses with great sales can get into a cash crunch waiting to get paid.â€
Watching the inflows and outflows of cash in your business is a critical management tool SME business owners can forget.