Cash when it is working for you, is king.
However, cash sitting idle in a bank account fritters itself away, slowly, and over time.
Inflation, small purchases, fees, all eat away at the cash like mice in a wheat silo. A bit at a time.
Cash does not generate cash flow without being put to work. It is like going to the gym, it takes time, effort and commitment, but the result will show. Even when there are short term setbacks, interruptions, and periods of despondency acting as a brake, keeping working works.
We are in a time of unprecedented change.
This is more than just the Covid hangover starting to evolve, all that has done is greatly accelerate the changes that were emerging on the fringes.
The status quo in many areas has been thrown out the window. While that is deeply unsettling, and creates challenges most of us have not seen before, the flip side is that it also throws up opportunities not seen before.
Opportunities to fill the merging market niches, to pivot to different business models, serve new customers in different ways, or just grab assets and market share from less nimble competitors.
All of this consumes resources. The management time and inclination to make the necessary changes, and the cash to make it happen.
Successful businesses understand in detail how, and how much cash their enterprises generate. They keep borrowings to a minimum, giving them the ability to grab opportunities as they emerge, but they also keep their cash working, hard.
Header carton again courtesy of Scott Adams and his alter ego Dilbert.
