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The Importance of Healthy Cash Flow
In this post about The Importance of Healthy Cash Flow I am endeavoring to highlight to a vast majority of people in the online home based business industry that there is a massive importance to working a healthy cash flow mentality into your day to day business. Most people think that I will sign up to an online business, send out a few emails and just watch the cash flow come in!
In an article posted in "businesscasestudies.co.uk" the author writes "Cash flow is of vital importance to the health of a business. One saying is: "revenue is vanity, cash flow is sanity, but cash is king". What this means is that whilst it may look better to have large inflows of revenue from sales, the most important focus for a business is cash flow."
In an online business our expenses include, our own opportunity monthly membership fees, advertising costs, continued education and computer costs. These expenses can get out of hand if you do not set up a budget exactly as you would in a bricks and mortar business.
"The importance of strong cash flow is aptly stated in the common expression "cash is king." The premise of this is that having cash puts you in a more stable position with better buying power. While you can borrow money at times, cash affords you greater protection against loan defaults or foreclosures. Cash flow is distinct from cash position. Having cash on hand is critical, but cash flow indicates an ongoing ability to generate and use cash." (article in smallbusiness.chron.com read more here.)
The importance of healthy cash flow in your online business simply cannot be underestimated. Many people turn to the internet for cash because they are looking for a second income or they are in debt and desperate or they might be discerning and just investigating the possibility that earning a healthy cash flow is even possible online!
Well yes it is possible and thousands upon thousands of men and women the world over are succeeding. Those that are succeeding will also advise you to have a good accountant because your income can escalate quickly, exponentially and putting cash aside for tax purposes is a very important consideration. (You can also add in your accountants annual fees and a bigger picture arises).
That bigger picture, if you are sincerely contemplating an online income, - the importance of healthy cash flow plans need to be built into your business plan. Yes you need to have a business plan. If you went to the bank and asked for cash, the first thing they would ask you is can I see your business plan. If you didn't have one - guess what - meetings over.
Are cash flow and profitability the same?
Why is cash flow important? Isn't profitability more important? "Well there's an old maxim that no business ever collapsed because of lack of profitability but many have gone under because they lacked cash. Having cash allows a business to operate.
So managing your cash resources and making sure you have enough to meet your needs - eg paying wages, buying supplies, meeting your personal requirements - is absolutely critical." (read more at realbusiness.co.uk)
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As you consider an online income you can see that there is a serious business opportunity available to you when you carefully study how. - A healthy cash flow is very possible and you need to think before you dive in and waste your hard earned cash like I did.
Profit is that part of your income/turnover that is left after every expense has been taken into consideration. So you can see that you can have a very high cash flow and not much profit. Your business goals, in your plan, should include your income expectations and also your profit margins. Where will I invest etc.
In an article written in NFIB.com read more here, "No company buys what it needs or pays its employees out of profits. Certainly profits are a source of capital for expansion and debt reduction, as well as for the eventual ability to pay bills and meet payroll, but wages and other expenses must be covered with cash. A business can survive indefinitely if it doesn't run out of cash, but without cash it can remain open only weeks or months regardless of how profitable it might be on paper. Many businesses have appeared profitable on paper right up until the time they were forced to close because of a shortage of cash."
The importance of healthy cash flow can be seen from many different angles and in my blog I am undertaking a massive thing.
I want to help as many people as I can realise that you can change your life with a change of mindset, with a change of attitude.
You can come out of any circumstance and get ahead as you have sometimes believed impossible.
To learn more about the opportunities I am involved with you can browse my blog in particular the "Affiliate Opportunities Page" or simply click on any of the banners below.
You can. I am. Simply Believe.
Take Care
Colin
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Posted in Real_Estate Post Date 12/06/2018