Do you have enough cash to avoid disaster?
The Chronicle’s Business blog / Jerry bellune
Do you want profits or wealth?
As a business owner, you need both.
You cannot have wealth without profits, says our friend Ruth King of ProfitabilityRevolution.com .
Many business owners focus only on the Profit & Loss statement and totally ignore their Balance Sheet. They focus solely on profits rather than building wealth.
You can go out of business ignoring wealth to focus solely on profits.
Ruth tells of a contractor who, in a single week, lost 3 major clients to bankruptcy and more than $1 million in uncollected receivables. He needed cash to survive.
Had he focused on building cash (i.e. wealth) in addition to profits, he might have struggled but his business survived.
Here are 2 steps you can take.
1. Check your Balance Sheet the last day of each month. Is your checking account growing this month over a month a year ago? By how much? Should you transfer any of that to an interest-bearing account?
2. Ask yourself how you might grow your cash faster. What expenses might you trim or eliminate? What can you do to grow your gross sales and net profits?
We share such ideas in “Maverick Entrepreneurs’ Million Dollar Strategies.”
Copyright 2019, The Bellune Co., Inc.