Welcome to another edition of Future Proof.
We’re going to continue the conversation of Cash Flow and identify what the critical elements are that you need to get right in order to make sure your business is cash flow positive.
The first thing to look at is your business model. For a business to be operationally cash flow positive, the business model needs to be profitable. So to make sure your business model is, it’s important to look at things like your pricing, margins, revenue, cost of production etc.
Once we have confidence around your business model then we can work on the other five elements, to make sure that your cash flow position remains strong.
Hey guys! Greg Smargiassi here from OURCFO with another edition of Future Proof.
In this segment we're going to continue the conversation around cash flow. And what are the critical elements that you need to get right that you need to strategise to ensure that your business is cash flow positive. So the first area that we're going to take a look at is that of your business model. Your business model will determine the sustainability of your business and what I mean by that is profitability. So for a business to be operationally cash flow positive the business model needs to be right.
The business model needs to be profitable. So the kinds of things that we would look at from a business model perspective are your pricing, your margins, your revenue, your cost of production, your overhead structure, your relevance in the market. All of these things really do need to be reviewed especially now in that business is so fluid, so dynamic and so rapidly changing in the environment that we're currently operating in. So profitability is really the first step to ensuring that your business is constantly and consistently cash flow positive and once we have confidence around the business model then we can work on the other five elements to ensure that your cash flow position remains strong.
I hope that's been of value. It's another edition of Future Proof and I look forward to seeing you again soon.