by Thandekile Moloko
An integral part in the running and growing of a business is finding an optimal balance of managing revenue and expenses. This is one aspect of financial management that cannot be disregarded. In most cases, the management of your revenue and expenses can be the lifeline of the business. It allows for a longer runway to achieve the financial and expansion goals set out for the business.
Many entrepreneurs who run small to medium business make the calamity of thinking that in order to grow a business you just require profitability. However, in reality a business with a positive cash flow balance is one that grows at a faster rate than a business that is just profitable.
The term “Cash is KING” stands true for businesses in the early development stage, as cash assists the business in terms of daily operations. There are multiple ways in which a business can have and maintain a positive cash flow.
A cash flow positive business increases its revenue by supplying more products and services; benefiting from economies of scale.
A cash flow positive business; increases the speed of collecting receivables; the quicker clients make payments, the quicker a company can use collected funds for other business projects.
A cash flow positive business decreases expenditure by keeping expenses as low as possible, providing the business with leverage to use the excess cash generated within the business for expansion and operational purposes.
A cash flow positive business only takes on projects that have a positive Net Present Value, which means that the business has the prospect of gaining money on hand for business operations and expansion needs.
Therefore, the importance of finding the optimal balance in your cash flow management is vital, as it will assist you in developing a sustainable business and taking your business to the next stage of development.
Thandekile Moloko is a Wealth Coach and Wealth Manager by profession. She went to the University of Johannesburg. She studied Bcom Finance and Honours in Financial planning. Her love for people and changing people’s lives lead her into the financial planning. Thandekile was requested to be part of the ASISA (Association for Savings and Investment South Africa) program to enhance financial planning as an industry. She encompasses tenacity for finance, especially wealth management and personal financial management. With insurmountable experience gained in the industry, she has blazed the market with her expertise within the financial planning industry. With the intent of reaching a larger audience, she decided to increase the scope of her work into Wealth Coaching. In her Wealth Coaching career, she has changed many people’s lives and she changed the landscape of wealth management to be inclusive of those that need it the most. She is an avid believer in changing lives one financial situation at a time. WEBSITE / LINKEDIN / TWITTER
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