The levers that impact cash flow and working capital are critical to running a successful business day to day, but they are also critical to building business value over time.
From a day-to-day point of view, the more cash surplus in the business, the more value in your pocket. Having surplus cash that can be used as working capital also gives your business more options to grow, invest and change.
Taking the longer-term perspective, ability to generate cash is a critical component when it comes to determining the value of the business should you wish to exit. Banks and potential purchasers will all want to assess your Business Maintainable Earnings (BME), which is essentially a measure of cash generation in the business.
So what are you waiting for? Download the free Working Capital Checklist here and let’s start managing those levers.
If you would like support or advice regarding working capital and cash flow management, contact the business advisory team at JPAbusiness for a confidential, no-obligation 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.