Monday, 27 December 2010

Cash flow for business

Tower Bridge - Engine House - London

A business is a legally recognized organization whose purpose is  to provide goods and (or) services to private consumers or other companies in exchange for money. Businesses are the basis of capitalist economies and societies. Most businesses are privately owned and are created to earn profit and wealth for its owners. The  main objective of businesses is the generation of a financial return in exchange for work and acceptance of risk.

This system of money in exchange for services or goods is a good system but the risks are huge. The transfer of money, the borrowing of money (to  support the business or buy goods and services) itself incurs costs. Businesses need cheap borrowing and free day-to-day banking. This makes all the difference to a new business. It makes sure that every single penny earned goes towards creating a successful business.

Cash flow and use the funds to help grow your business is a balancing act that needs the skills of a tightrope walker who is prepared to walk across the Grand Canyon  without a safety net. The ironic thing is, the more you invoice the more you can borrow, which means the more you potential earn the deeper you can get into debt, funding grows with  sales. Capitalism is a strange fish......


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