Why Cash Flow Is More Important Than Revenue
Dan Lok Show
Dan Lok
4.9 • 824 Ratings
🗓️ 6 August 2020
⏱️ 4 minutes
🧾️ Download transcript
Summary
Have you ever heard people go out of business because they have too much cash flow? Likely not. That’s why cash flow is more important than revenue. Listen now to discover how to solve cash flow issues once and for all.
Transcript
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| 0:00.0 | So, long story short, this is my club for the last few years. |
| 0:16.0 | I'm so excited to be back here. |
| 0:18.0 | This is a ripple effect of what I've been growing for the last three to four years around going to school. And so one thing that had the biggest issue with was occasionally cash flows knit me in the |
| 0:56.8 | butt even when I was making, you know, two, three thousand a week, but cash flow still suck |
| 1:00.1 | me up. |
| 1:00.6 | So I had to learn how to deal with cash flow issues while making good money, even though it seemed, |
| 1:05.2 | even though it's making money. |
| 1:06.1 | Revenue is there. |
| 1:06.8 | The revenue was there, but the cash flows weren't. So what intrigued me about what you said was you have to learn how to take profitable clients, |
| 1:14.3 | you know, basically in tough times. |
| 1:15.7 | And so what I struggled with, and I'm curious on your opinion, is there's multiple times |
| 1:19.5 | where I had, you know, a very good two or three weeks. |
| 1:22.5 | I made a lot of money, but my franchise wouldn't pay me for five weeks to pay my employees. So what I had to do is I'd have to take, you know, give a client $500 off a $7,000 job |
| 1:31.9 | in order to get a deposit to pay my employees. |
| 1:34.5 | It became a dangerous circle. |
| 1:36.6 | And but so I'm just curious, I know that was a franchise model and that's not what I do anymore, |
| 1:40.5 | but I'm curious on your opinion as to how you would handle such conflicts |
| 1:45.3 | where you look at, do you pay your people this week or do you take a pay cut on a job |
| 1:50.6 | to pay them or do you get my point? |
| 1:53.1 | I either have to let them take a little bit of a hit or I have to take a hit and I have |
| 1:57.5 | to understand where the fine line is for the business to stay functionalable. So then you think about you are either getting a deposit or like basically |
| 2:05.2 | Rob A to pay B and all that stuff. Exactly. So that is very tactical. And that's not always |
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