Self-Made

5Product market fitA prerequisite for sustainable cash flow and profitability

One of the most important factors in running a successful and profitable business is cash flow management; a close second is product market fit. How well you manage your cash flow will have a significant impact on the profitability and longevity of your business.

Cash flow can also be the most challenging and stressful part of running your own business. And depending on your prior experience when it comes to running a business, you will learn most of the important financial management principles by doing.

TIP

The better you are at handling your own personal finances and budget, the easier you will find managing your business cash flow.

Nearly every woman I have ever mentored in business has said that cash flow is their biggest challenge. This is closely followed by understanding financial metrics and being able to read and interpret their profit-and-loss statement (if they even have one).

Business success really can be summed up in the formula:

Making sure you are generating more income than you are spending is the most basic fundamental principle of owning a profitable business.

Where this formula is too basic is in the early stages of starting or growing a business, as it takes time for income to grow. Starting from a $0 base for income sets you behind in the early stages while you have expenses ...