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Why positive cash flow matters
The saying goes at the end of the day the bottom line goes by saying what is the left over after all the revenue and expenditure is what matters be it 1 dollar or be it 100 dollars.
Cash flow positive is the best parameter to judge a startup and its implementation success is by this parameter alone. This clearly indicates that the product or service has been accepted and business has a future for next 1000 days and after which it will again have to re invent the wheel.
If were to understand in basic language then it is seeing results of you working hard and smart to achieve the desired result its like studying well and getting good grades and getting promoted to next grade. At same time moving to next grade things will become again tough.
Just passing 9th grade with good marks and then falling in 10th grade people forget 9th grade and remember 10th grade failure the same is with startup having positive cash flow is one indicator that things are good and fine but it should be ensured it will always remain good and not fall.
Every startup or company also gets the benefit of having cash flow positive where in they can plan to raise funds for expansion or fueling more growth with current and past performances of having cash flow positive.
As cash flow is the end point of startup having it in positive gives clarity that all the work that is being done is bearing fruits and the work is being done in correct way and to right market as the same way as a tree bearing fruits only when its healthy and its soil is fine.
Every CEO keeps eye on cash flow and works around all the strategies keeping in mind how to make cash flow positive and how to ensure right steps in the direction.