Cash Flow and Profit

Although it is important to have the right location, ambience and menu, your business cannot survive unless you make a profit. The reason you are in business is to make money. Profit is what you are paid from and managing your cash flow is how you protect that profit.

Some ideas to protect your profit are:

  small additional expenses must be kept to a minimum   perfecting your ordering to stop casual expenditure when you run out of something should remain one of your prime priorities   always think major expenditures through thoroughly by calculating the impact of that expense on the future performance of your business Right from the start you must implement systems to protect that profit. Your staff would not like it if you started spending their pay, but if you let them order indiscriminately then that is exactly what you are allowing them do to your own pay. Profit is also what keeps your business alive. From day one it pays to remember that you need to make a profit to reach your goal of a successful business.Cash flow and profit go hand in hand. They are the two essentials every small business needs to be most concerned about. If either cash flow or profit are missing from your small business then you will be in a downward spiral until you can correct it.

Share with your staff

You should learn to appreciate just how important they are to the survival of your small business. Cash flow and profit are not dirty words. In fact they are so important that you should try to use them every day in your business discussions. Talking about cash flow, profit and your margins reinforces the importance of keeping more money than you spend and helps everyone appreciate their obligation to your business. Get into the habit talking margins and profit to your staff from the very beginning.