📄ONE-PAGE LESSON 2
Key Points You’ll Learn
💵 Understand why cash flow is more important than profit
🔍 Learn how to track and analyze your inflows and outflows
✅ Apply simple strategies to strengthen liquidity and avoid crises
Why This Matters
Cash flow is the lifeline of your business. While profits look good on paper, it’s cash that pays bills, salaries, and keeps the lights on.
Many profitable businesses have failed simply because they ran out of cash. Managing it effectively means you can fund growth, weather downturns, and avoid relying on emergency loans.
Core Insights
- Cash Flow vs. Profit – Profit shows long-term success, but cash flow shows whether you can survive today. Always distinguish between the two.
- Three Types of Cash Flow –
-Operating Cash Flow: Money from your core business activities.
-Investing Cash Flow: Money spent or earned from buying/selling assets.
-Financing Cash Flow: Money from loans, equity, or owner withdrawals.
- Why Businesses Struggle – Late customer payments, excess inventory, and unmanaged expenses are the biggest culprits of cash shortages.
- Practical Fixes – Speed up collections, negotiate better supplier terms, control discretionary spending, and build a cash reserve.
- Tools That Help – Use cash flow forecasts, dashboards, or even simple spreadsheets to anticipate problems before they happen.
Quick Exercise
1) Review your last 3 months of bank statements.
2) List your total cash inflows and outflows for each month.
3) Identify one area where cash leaves too quickly (e.g., slow collections, high overhead).
4) Choose one small action this week to improve it (send reminders, cut costs, renegotiate a bill).
Call to Action
Cash flow management is not a one-time task — it’s a discipline. The more consistently you track and act on it, the stronger and safer your business becomes.
Face it. Manage it. Strengthen it.