Cash is so important, I devoted a whole chapter to it in my book, The Funding Is Out There! Access the Cash You Need to Impact Your Business.
You need to know how to retain your cash. Cash is what enables you to have the time and space you need to make the requisite changes to weather a crisis and emerge even stronger.
Let me give you an actual example.
A security firm I worked with was struggling. I reviewed the financial statements but items seemed to be missing. So I put together a 12-week cash flow...and was floored! According to the projections, they weren't generating enough money to stay open. Yet they had all these contracts.
The owner explained that she priced her contracts "at cost plus a little bit more". Well, after we walked through her pricing, I realized her "cost" omitted several items so her costs weren't covered.
Digging deeper, I determined that all but two contracts were seriously losing money!! It was her husband's cleaning business that was keeping her $2 million security business afloat.
For two years they had been paying people they knew under the table to perform security services! They had been hemorrhaging cash but had never taken the time to determine why.
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