As you grow your business, it is wise to be very intentional about your plans for becoming strong financially.
Here is my approach to planning the path toward winning financially in business.
Here is the 10 step process shown in the graphic:
Step 1: Build your cash balance to 1 month of expenses
Step 2: Put aside enough cash to pay your income taxes
Step 3: Define your Profitability Gap (the goal is above average profitability)
Step 4: Create the forward-looking view of financial performance
Step 5: Pay your bank line down to zero (even if it's temporary)
Step 6: Reduce your personal guarantees (begin the process)
Step 7: Build your cash balance to 3 months of operating expenses
Step 8: Use existing cash flow for capital expenditures and growth capital
Step 9: Pay down your remaining debt on an accelerated schedule
Step 10: Reward the owners of the business with cash
I'll talk in more detail about each step of the process in future posts.
Click here to get my blog posts delivered right to your email inbox. I publish one new post each week.