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You don’t pay rent, meet payroll or pay your bills with profit.

Australian Cash, $50 and $100 notes.

You don’t pay rent, meet payroll or pay your bills with profit.

Australian Cash, $50 and $100 bills.


A lack of accurate financial information can be a major cause of stress and concern for business owners and their families. Especially when it affects visibility over cash flow, not only in the business, but the flow on effect at home.

In our world, we often hear: “You can go broke making a profit.” and “Cash is king. Profit is theory.”

As a business owner, making sure you are not caught in a state of paralysing surprise, understanding your cash flow is essential to manage your business. As you may know only too well, you don’t pay rent, meet payroll or pay your bills with profit.

You pay them with cash.


A business can make a lot of sales, have a book full of orders, have delighted customers and clients, have a great reputation, be growing, and yet still go broke.

Why? Cash flow.

A business might be profitable on paper, but have no money in the bank. This can very quickly lead to insolvency, which is when the business cannot pay its debts when they are due. (There are serious penalties if you allow your company to trade while in this state). 

A growing business is often hungry for cash … hungry for inputs so it can make the business’ outputs, be they physical products, services or a combination of both.

Cash flow crises can often be averted. With foresight, the cash flow crunch can be predicted, planned for, and necessary contingency measures put in place.

For example, if a business has seasonal effects where some months are busier than others, or if a business knows it has some jumps in expenses or fixed costs approaching—such as moving to larger premises or hiring more staff to cope with growth—then these expenses can be planned for and funded with the planned income in those months (or with short term debt).

Which would you prefer to do?

(a) call your bank manager and ask for a short-term loan or increase of your overdraft when you are urgently in need of the cash (and therefore stressed, and desperate, and not in a great frame of mind to negotiate good terms), or

(b) call your bank manager 6 months in advance, meet with him or her to explain the coming cash crunch, the reasons behind it, and plan for the required funding in a calm, relaxed, totally-in-control manner?

Not only would you get the loan, you would impress the bank manager and strengthen the relationship for further funding, should it be needed to support growth.

The bank manager would see you are a skilled business owner with a planned approach to your business, not a fly-by-the-seat-of-your-pants operator. (They see a lot of those and they don’t like doing business with them).

Apart from building a stronger relationship with your bank, there’s the immediate effect of sleeping better at night.




We all seek a level of certainty for comfort. Knowing what lies ahead in business and planning your cash flow gives you peace of mind and confidence in your day-to-day operations that will rub off on those around you…in your workplace and at home. And that’s a good feeling!

This is one of the reasons we are so passionate about helping our clients put together cash flow forecasts, to help them keep their business on track and to avoid any unnecessary, stressful, and unpleasant surprises in the coming months.

It doesn’t matter whether a business is a one-(wo)man hairdressing business, fabrication business with 10, 20 or 200+ people, and everything in between – every business needs a working cash flow.

Every business needs a cash flow forecast.


Running your business without a cash flow forecast is like driving a car at night along a dark country road with only your normal headlights on. It’s hard to see what lies ahead. Some wildlife might come right out in front of you, leaving no time for you to react. CRASH!

On the other hand, a cash flow forecast is like driving along that country road with your high beam on. You can see so much more. You can drive with much more confidence. Less stress. And avoid the CRASH!

In helping our clients build realistic cash flow forecasts, we often can spot problems and make suggestions that help improve the business’ cash cycle. This puts money in your bank account sooner!

For example, a combination of negotiating better terms with suppliers, tightening up or at least clarifying and enforcing your business’ own credit terms, and reducing stock holdings and waste can have a powerful positive effect on your bank balance.

So, if a cash flow forecast is so crucial, why do many businesses not have one?

Simple. Business owners get busy. Busy pleasing customers or clients. Busy dealing with staff. Busy paying suppliers. Busy generating sales.

Also, it’s easy to get ‘too close’ to your own business. “You can’t see the forest for the trees,” as the saying goes.

Having an independent and fresh pair of eyes come in and look at your business—especially cash flow being the life blood of business —allows opportunities for improvements to be identified and executed. Opportunities that already exist, but difficult for the business owner to see amidst the ‘busy-ness’ of it all.

So, what should do about it? Take action. Call us. A cash flow forecast costs less than you think.  And the value will be returned to you many times over.

It’s time to turn those high beams on!




Before acting on any General Advice, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) for that product before making any decisions.

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