Hello and welcome to Business 300.

My name is Philip Kulenshov, and this is 300 seconds about business.

We're all a busy people, so I have five minutes or less to get my point across.

If you want to listen to Business 300, you need to set aside five minutes.

If you want to grow your business, you need to set aside cash.

In the last episode, I said that growth requires cash in two forms.

The first is upfront cash, which enables the growth, equipment, certain positions, etc.

The second is the back-end cash which follows the growth, material, labor, and other operating expenses.

The first is investment. The second is working capital.

I bring this up because much of the time, business owners are under the impression that growth in cash increase and decrease together.

But that's false.

Growth in cash have an inverse relationship. The more growth your business experiences, the less cash it'll have. For some businesses, this may not be

as noticeable because they shuffle their way up. The return on investment happens in little

bite-sized increments that gets realized quickly. The time span between investment and return may be

short, but it's still there. Which means that if you want to grow, you need to make sure your cash can sustain it.

This is why it's important for a business owner to understand and be aware of the cash flow statement.

A cash flow statement divides into three groupings, probably because Trinitarian structures are the best kind.

There is cash from operating activities, what your operation brought in or. There is cash from operating activities, what your

operation brought in or took out, cash from investing activities, what your assets brought in

or took out, and cash from financing activities, cash that moves to or from owners and creditors.

Some of this can be tricky, and not every business owner needs to understand all of the

complexities, but I do think that every business owner should understand

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