Keys to a Great Business

Great businesses have two things in common: Culture and Cash Flow

Culture: Those of you who fly, compare SouthWest Airlines to the non discount airlines. At SouthWest, the pilots help the attendants clean the cabin after a flight lands. No one is afraid to get their hands dirty. Good companies have great people who all pull together for a common goal-Make the Customer Love You. Bad companies have little compartments were Sales fights with Credit who fights with Production who fights with the Warehouse, ad nauseam. There is no playing of the “Blame Game” at great companies.

Cash Flow: Paper profits are great, but if your working capital is tied up in AR it is very difficult to make payroll. Every business should have a 13 week budget based on cash flow (how much cash goes in and out weekly) versus accrual or “paper profits”. A business that is liquid can take discounts from supplier, enjoy great credit and give the owner that “piece of mind” feeling. I understand that if you are just starting out, money will be tight. However, that is why a cash flow budget is so critical.

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