I’m at the Gazelles Growth Summit this week in Phoenix Arizona. Sharpening my axe.
Spent a half day with the other Certified Coaches yesterday afternoon. Spent a good two hours working teaching the People Decisions of the Four Decisions(tm) Model. Great session.
The the insight I want to share this morning is from the next session. Cash Flow: Blind Spots in your Financial Dashboard. Alan Miltz, a cash flow thought leader was the presenter.
Banks look at your ability to service your debts. Period. Do you have or are you generating the cash to cover your obligations. You should be looking at your business this way as well.
You can improve your cash by revenue growth, or better management of assets, or both. But must American business owners get lulled into the revenue growth only, and don’t manage the assets and end up borrowing 40 cents on the dollar to generate 30 cents on the dollar in revenue growth. Bad formula.
One other interesting insight from Alan. A client of his outsourced his inventory from China, almost crippling his Cash Flow. He thought, mistakenly, that the higher margins due to the lower cost of goods would deliver higher profits, which it did. But killed his cash. Because he had to hold more inventory, eating up cash, and he had to pay the Chinese for the inventory upfront before they shipped, eating more cash, creating more debtor days. And he though he was doing well. (another reason to question the almost automatic move to outsource suppliers overseas).
Looking forward to more insights from Alan later in the week, as he is doing a keynote later in the full summit.
More tonight, the night after, and the night after than.