Business is all about money. It revolves around money coming in, money going out, money owed to you and money you owe. It all relates to earning money or losing it. This is the reason why there is this business adage that says, “Cash is King”.
Cash flow, or the movement of funds in or out of the business, is one of the most critical components of success for a business concern. Without cash, profits are meaningless. It is very important for a business owner to understand the finance tools and exercise good cash management. Otherwise, the business will not be able to make the investments needed to compete, or may have to pay more in order to borrow a loan for its operations.
Business owners should also understand and learn how to work with bankers and investors. Investing funds and/or borrowing funds form part of the major decisions to run a business. Therefore, it is best to develop a basic understanding in banking, finance, investments and loans to help the business prosper. Twigging money tools is to understand them … learning and application will follow.