Cash Is King!

The generation, and management, cash flow is the greatest discipline to be a successful business owner.  Cash flow should be at the forefront of every decision made.  How you generate and how you manage cash will determine your growth and success.

Business owners fail to realize the most important thing to do is to generate cash from customers.  The complete focus to success is to generate cash to drive the business.  You should have a whatever it takes attitude to generate this cash flow.  The key to this cash flow generation is marketing, marketing, marketing.  What many owners fail to realize is you must spend money to make money.

Cash management is just as important as cash generation.  You should use creativity to get paid but I hate to disappoint you, discounts are not the key to creativity.  Services should not be given until payment is made.  In cash based clinics this is payment for the treatment.  For insurance based practices this is the payment of the deductible, copay, or coinsurance.  Instead of billing patients after the fact, bill forward based on a best guest forecast of what the insurance will be paid.  Future invoices can be adjusted based on actual payments.

Explore payment options to receive almost simultaneous payments.  Not all customers will appreciate this but majority will happily pay for services at the time received.  On the business side, with accounts payable, stretch out these payments without a negative impact on your relationship with the seller.  Another key is to set aside a percentage (ideally 10% a week) to your emergency fund.

Cash flow is critical to your business and the stability of the cash flow in and cash flow out will better ensure your success.  To be a highly successful business owner you also need to “know your numbers!”

Do you struggle with your numbers?  If so, contact us for a FREE consultation.

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Andrew Vertson, PT, DPT, ATC
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