Some of the heaviest fog in the business world settles around the phrase “cash flow”. The term is seldom used correctly, and it’s even more rarely discussed in a practical, systematic way. I’ve encountered cash flow as the topic during my MBA in South Africa only once, and then it was just in a one-hour class.
Unlike what many business owners and managers may think, the main quantitative measure of a business’s success is not profitability - the excess of revenue over expense. Instead, it is cashflow - the excess of cash flowing into the business over cash flowing out of the business.
With municipal elections just around the corner in Portugal, it made me analyze the leadership on offer to voters in the council regions of Portugal. The result was that I found a massive lack of leadership on offer. Instead I saw just pure personal self-interest, greed, thirst for power underpinned by a blind support of a faulty economic "system".
With China being so much in the news about their growth, I look back at their stock market crash a few years ago, and it led me to think about Chinese superstition, numbers and financial matters. I look at the damage that the measures Beijing used at the time to stem trading losses may have caused to the Shanghai and Shenzhen exchanges, and ask myself if some of these measures were guided by superstition?
"I’d like to talk to you about another widespread, but too little challenged custom: earnings management. This process has evolved over the years into what can best be characterized as a game among market participants. A game that, if not addressed soon, will have adverse consequences . . ." An unknown auditor
Any entrepreneur should read this article before plunging into rental agreements for their businesses. In talking to some local business owners in the Algarve, we were shocked when we learnt what some of the landlords and rental agencies are charging for premises that could be used for shops, restaurants and other retail outlets in Lagos.
When starting a new business, many assume that going into debt is the only way to do that, but the truth is that there are other alternatives. You must look for creative business funding ideas. Funding a business doesn’t have to mean mortgaging your future for a start up business loan. There are many alternatives, and debt slavery doesn’t have to be one of them.
How to Manage your Business Money: Over the years I've known hundreds of small business owners, men and women, of all colors and creeds, who knew how to start businesses successfully. I have asked them why they put in the time and the effort, which is often substantial. With very few exceptions, they all agreed that they succeeded because they had a passion for what they did.