Entrepreneurs are of the opinion that they have lots of of problems causing them to lie awake at night thinking about their lack of cashflow, not spending enough time with the family because they work crazy long hours, feeling resentful having to work so hard for so little ….and the list goes on.
Over the past 40 years in business, 20 of which have been in the capacity as an author, entrepreneur and business educator, I have discovered that entrepreneurs don’t always have a lot of problems. They usually have a lot of the SAME PROBLEMS. I will prove this to you over the next few weeks.
Now don’t get me wrong. There are many businesses that will underperform or even fail for reasons outside the control of the owner. I will address some of these in future blogs but over the next few weeks I will share some ideas that cause entrepreneurs to underperform which could have been avoided by taking heed to what I going to share with you. Here’s the good news: the reason for a lack of free cash flow in many businesses is caused by activities (or lack thereof) that you might never have thought of.
By the way free cash flow is the cash that is generated by your business that is in excess of what you need to operate your business. It can be used to pay off debt, reinvest or used to pay yourself to buy the things that want in your personal life.
So how do you generate free cash flow without increasing your debt which could potentially cause a host of other problems?
Here is a list of 3 massive mistakes that stop entrepreneurs from enjoying one of the reasons why you became an entrepreneur.
- Non-financial entrepreneurs don’t understand how to read financial statements. Contrary to common belief, they are actually easier to understand than you may think.
- Confuse profits and cash flow. If you pay off your debt, are you richer or poorer? If you answered either one of these, you would be wrong.
- Entrepreneurs don’t ask the right questions when making business decisions.
Over the next few weeks I will broaden your frame of reference to apply your mind about topics and questions that you may never have thought to ask. Once understood, you will see how simple it is to generate more cash from your business and live your dreams.