🔊 While Profits are great on paper – CASH FLOW is king on the ground.🔊
Managing Strategy Cash Flow in your business is like energy in your body, it’s the lifeblood!
Any strategy requires a strategy cash flow performance process. Do you want to achieve something new? You will undoubtedly need an investment of some sort. And then you want to ensure that strategy cash flow will have a return on that investment over a period. This also has substantial influence over the tactics required to achieve your Vision.
There are a few elements to consider here. When you set your Moonshot vision, I always talk about reeling it back into something realistic. Breaking it down to sizeable chunks of work
✅And validating that work to ensure it’s relevant
A major aspect of that validation process is understanding the cash flow requirements!
And how the cash will work FOR YOU
✅The cash cycle must add up.
There is no point in investing without having a visible understanding that this investment will be fruitful in the future.
Strategy cash flow is akin to conducting a financial forecast. That’s solely based on the actual strategy and not the business as a whole. This should demonstrate cost v income over the course of each month, over time the investment will be in the black. However, that element should also feed into the overall forecasting process and with that get Financial approval.
While it’s important to follow your heart when it comes to achieving your moonshot vision
❤️It’s paramount to take your head with you
This is something you should never leave to chance
The other element to consider when it comes to strategy is cash flow. It is to build a cash flow strategy for your business. If I was to ask you, how many bank accounts do you have for your business? Would the answer be 1? While a great accountant can work well with 1 account I often advise you to have 3 or 4.
An example of how you can divide them could be
💲Working Capital
Day to day running of your business
💲Savings account
This is what you accumulate as net profits that in the future can be further divided
💲Investment account
What you are willing to invest in your future – your strategy for example
💲Crisis account
For when things go wrong you have a fund to manage the business through a difficult period.
This is just an example, there are multiple ways you can look at this. The key is to be able to understand real time, where your business is financial.
It also teaches you to be money smart and ensure you have a financial lens by looking at every decision made.
💥 I hope this helps, If you have any questions, please get in touch.
