More business go out of business due to lack of cash than any other reason. Know how your business makes money and then drive profit so that you are in control of your future. This video on financial strategy is taken from my book Wind In Your Sails.
If you prefer, here is the audio version:
Transcript of Financial Strategy
Hi everyone. I am Coach David J. Greer. Today I want to talk to you about financial strategy. First, pay attention to cash. It can be as simple as how much money do you have in the bank every Monday morning.
Many entrepreneurs focus on top line revenue and growing that. I believe that you need to focus on bottom line revenue and profitability. As long as you are profitable then every Monday morning your bank balance should be going up.
Financial statements have a lot of numbers, but what I believe is it’s not the numbers, but what the numbers mean. If you don’t have a lot of financial literacy around the difference between a balance sheet and income statement, I recommend that you the training you need to understand those differences, every line item, and what those numbers mean to you and your business.
If you do decide to bring in outside investors, I recommend that you look at it as a sales process. You are selling stock in your company or some other kind of equity for cash that the investors are going to give you. That sales process typically takes a year from when you first start it to when you actually get cash in the bank. You should plan accordingly.
Those investors are going to be investing in the people—you and your team, your idea, and your markets. That’s different than your product.
In my book Wind In Your Sails, I show how financial strategy lets you know what is going on in your business so that you can be profitable.