How Is Running a Business Like Maintaining a Car?

How is running a business like maintaining a car?

Answer: In both instances, you need to assess what is working and what is not on a regular basis.

Not checking your oil, tire wear, or brake pads can result in expensive repairs or even a costly accident.

Most privately owned businesses do not get the information they need for a meaningful assessment because all they receive is report of what happened, with no input as to what will be happening and how it could be improved.

Your car has a warning light that tells you your car will run out of gas in less than 50 miles.  If your Controller doesn’t give you a monthly cash flow report and a projected cash flow forecast, your business could easily run out of cash or have to forego important investments.

If a cash squeeze is projected down the line, a business can take early action, making adjustments like extending payables, collecting receivables more quickly, or better managing inventories.  If necessary, you can seek additional financing in advance.

If your cash runs out, your business will stop running. If your business breaks down, the repairs can be costly, and it can take a long time to recover.

A competent finance person can not only help your business avoid breakdowns, they can also provide insights to make your business more profitable and increase the enterprise value if you decide to sell.

Reach out to me if you want to talk about how hiring the right finance person can put the fun back into running your business and make sure you don’t run out of gas.

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