Understanding the sources and timing of cash inflows is crucial for effective financial management and seizing growth opportunities.
Primary Implication
Business owners who achieve financial freedom through their businesses are masters over their sources of cash. They are the best at capitalizing on new business opportunities because they know where they can source the cash to fund what they want to do.
Fail to cultivate multiple sources of cash outside of your cash flow from operations robs you of the flexibility to move on anything game-changing for your business.
Overview
Making more money starts by knowing your sources of cash. It is grounded in knowing when that cash is coming in. Knowing the sources and timing of cash inflows is the only effective way to disburse your money wisely.
Cash Inflows = Sources of Money. They represent any of the following sources of funds that come into a business:
- Cash Sales
- Sales Deposits
- Customer Account Sales (A/R)
- Line of Credit Advances
- Loans from Lenders
- Outside Investment Money
- Personal Savings
- Interest Earned on Savings
- Repayment of Business Made Loans like Employee Loans
- Other Money Receipts
Fail to cultivate multiple sources of cash outside of your cash flow from operations robs you of the flexibility to move on anything game-changing for your business. Those business owners who aren’t constrained by a lack of cash achieve financial freedom through their businesses because they are masters over their sources of cash. They are the best at capitalizing on new business opportunities because they know where they can source the cash to fund what they want to do.