[This blog has been republished in the wake of COVID-19 developments, as having the liquidity necessary to continue operating effectively is critical in these times.]
As business valuers and brokers, and in advising clients on business performance and financing, there is a critical thing we look for: liquidity.
Liquidity is effectively how much cash a business generates and how stable and frequent that generation is. That ability to generate cash is a critical component of business value.
As we often say, owners need to think about the value they get today in running their business, versus the value they get in the future when they sell.
The more cash surplus in the business, the more value they’re deriving into their pocket today. But cash surplus – as working capital – also gives a business more options to grow, invest and change, and build value over time.
How to maintain control of your cash flow
This cheat sheet contains 14 of our top tips for managing your cash flow, to help you maximise the value of your business.
If you would like advice or support to manage your business' cash flow, contact the team at JPAbusiness on 02 6360 0360 or 02 9893 1803 for a confidential, initial discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.