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.
- Felix Dennis