Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Cash Flow – Financial Fitness for Small Business Tips

Posted by Hopeton on December 14, 2010

The purpose of the  Financial Fitness for Small Business Tips is to provide information that will help aspiring and existing small business owners be better prepared to finance the start-up and growth of their businesses in today’s economic environment.  The following tip was provided by Emerson Hall, Community Affairs Specialist for the Federal Deposit Insurance Corporation Dallas Regional Office.  For more information on the financial literacy resources provided by FDIC go to http://www.fdic.gov/consumers/education/.

Cash flow is defined as the movement of cash into and out of a business enterprise and is described by many as the life blood of any business. Positive cash flow is an essential element of a successful business. In order to establish and maintain a viable business, a business owner must understand and properly manage the business cash flow.

Proper management of cash flow reflects the owner’s ability to operate the business, whereby, all expenses are paid timely and having sufficient funds remaining to make debt payments. Lenders and Investors consider cash flow as a critical aspect of the business operations when evaluating a business for potential funding. Cash flow management requires attention to all the details of the business enterprise.

Most inflows from a small business are derived from operations: cash sales and collections of receivables. Other possible sources of cash inflow would include investment income from interest of dividend income, and financing income form sales of assets (not in the ordinary course of doing business) borrowed funds, lawsuit and insurance payments.

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3 Responses to “Cash Flow – Financial Fitness for Small Business Tips”

  1. […] post: Cash Flow – Financial Fitness for Small Business Tip « Economic … Wednesday, December 15th, 2010 Uncategorized TAGS: better-prepared, business-tips, businesses, […]

  2. […] Cash Flow – Financial Fitness for Small Business Tips « Economic Perspect… […]

  3. […] Cash Flow – Financial Fitness for Small Business Tips « Economic Perspectives […]

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