How Do I Make My Business More Profitable?http://www.financialforeplaybook.com Why Profit is Pointless and Cash flow is King . Knowing exactly where you stand financially, i.e. your cash position, means that you don't have to wonder "do I have enough money to cover my rent and wages this month?" The health and vitality of your business are dependent upon your ability to cover all tax obligations, payments to suppliers and operational expenses as they come due in your business.
Unfortunately, knowing where you stand is not as simple as looking at your bank balance or your net profit. Your bank account merely shows your cash on hand but it will never tell you what your cash flow is or (more importantly) HOW to improve it.
Cash and cash flow are not the same thing. Cash flow is about the movement of cash in and out of your business as it operates over a period of time.
This distinction is crucial to your success - if your company is profitable on paper yet it maintains a negative cash flow for an extended period of time, eventually it will go under.
But what does this mean for you and your business?
Essentially it means that, "cash flow is King". You cannot afford to run your business by simply printing and looking at your Income or Profit and Loss statement each month. Being able to calculate and monitor your cash flow position regularly is critical to your company's health and survival. You can have the most brilliant product or service but if you don't have positive cash flow, your business will eventually go under.
If you want to learn more about this topic "Finding the Point in business" - improving both your profitability and cash flow, I recommend that you check out Chapter 1 of Financial Foreplay http://financialforeplaybook.com
