You have very likely heard the phrase that the three most important things in real estate are: (1) location, (2) location, and (3) location. For small business finance, the equivalent three most important things are: (1) cash flow, (2) cash flow, and (3) cash flow.
While cash flow is key in any type of commercial organization, it is especially important in a small business. Cash flow is simply the net timing of the cash flow coming in and the net cash flowing out of the business. It really is as simple as that.
Often small business owners get tied up into other metrics, such as earnings, turnover efficiency or profit margins. The reality is that if the net cash flow is always positive, then everything else will take care of itself.
Small business mangers have many tasks to manage. However, cash flow should always be the first and foremost of their priorities.