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Cashflow


Cashflow is the lifeblood of any profitable business.

  • Poor cashflow is a Risk of Ruin. It can happen due to unviable expansion or under capitalization.
  • If cashflow is good, then no matter how badly run the company might be, there is always a chance of turning its fortunes around.

Not being on top of Customer Acquisition Cost and payback can severely impact your cashflow: If your CAC is Rs. 10,000 and your Subscription costs Rs. 5,000 per year, then you’ll start earning a payback after 2 years. During this time, you’ll be effectively running a negative cashflow business.


Footnotes

  • Felix Dennis
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