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I know it’s mere jargon but realistically, how hard is it to get the concept of ‘break even point’? It’s just the amount of income you need to earn in order to cover all of your expenses. Having a budget will get you halfway to knowing what this point is and it’s critical to cash flow. This is the point where the bathwater stops leaking straight out of the tub. It’s the point where you can start to build your business and take some profit away from it.
Knowing your break-even point will help you get into the good habit of core capital management. This is the real indicator of a healthy business, as opposed to a profitable business with poor cash flow.
Adequate ‘positive’ cash flow is essential for the survival of any business, yet this is something that over 50% of small business owners struggle to manage. Bandaging cash flow problems with temporary cash infusions is a strategy often used by entrepreneurs, but a business ultimately needs to fix structural problems in their operations and financial management habits to build longevity.
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Subscribe by email and instantly get FREE Illustrated eBook. Adequate ‘positive’ cash flow is essential for the survival of any business, yet this is something that over 50% of small business owners struggle to manage.