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Happiness is a Positive Cash Flow – Some More Information

August 25, 2015

Do you understand blood?  Perhaps not, but you know that your body needs it or you will die.  The same with cash – your business needs cash or it will die.  However, unlike blood, you need to understand the flows of cash.

  • Fact: A growing business is always short of cash
  • Fact: A declining business usually starts its decline with a spurt of cash
  • Fact: You will have the most cash ever in your business when you liquidate
  • Fact: It is easier to obtain loans when you don’t need the money than when you do
  • Fact: Most businesses do not apply for a loan until they need the money
  • Fact: Profits don’t mean anything if they are not represented by cash
  • Fact: Cash has to be managed

Cash flow is the movement of cash in and out of the business.

Everything you learned about balance sheets and profits is a myth if you cannot write a check to pay your employees’ salaries, your rent or your salary.

Happiness is a positive cash flow.  Manage your cash flow successfully and you will be happy.

2 Comments leave one →
  1. 6hawthorne permalink
    August 25, 2015 11:48 am


  2. Bill McGovern permalink
    August 25, 2015 2:54 pm

    Cash is only one third the story of cash flow. Another third is time. When does the cash go out? When is it expected to come in? How much is needed to avoid cash balances of zero or less? The last element of cash flow is the source, where does it come from? Owners? Investors? Banks? Customers? Some of these sources have to be paid back, others, not.

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