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Cash Flow – UW Tacoma VIBE Brown Bag Session

John Rodenberg speaking at the VIBE presentation

In Autumn quarter 2016, VIBE held a series of Brown Bag sessions to inform and educate business owners in the area.  Our MBDA Tacoma team had a chance to drop in and listen to a guest speaker, John Rodenberg from Small Business Development Center (SBDC), talk about cash flow.  John Rodenberg is an experienced business consultant, mentor, and advisor – and he can be all of the above and more, depending on what kind of business help is needed.  John reminded about the importance of businesses being aware of their cash flow.  

So, what is cash flow and why is it important?  Rodenberg explains that it is the cash balance of a business, and how it changes over time, with the “plusses & minuses” or “ins & outs”.  

For example:  You have daily transactions recorded with customers, suppliers, maintenance, landlords, and insurance companies.  This comes out to be a lot of debits and credits that all need accounting.  John noted that very effective owners/managers have a report on computer or desk by end of day or business week summarizing total amount of sales for day/week, number of customers, total cash balance, and major problems which caused unforeseen expenses. Knowing the actual cash flow allows a business to assess its abilities to pay off debt, take on new loans, buy assets, and to grow.  John Rodenberg identified four factors that influence cash flow:

  1. Product or service description
  2. Business model
  3. Retail or wholesale?
  4. Business-to-Business or Business-to-Customer (B2B or B2C)?

Consider the year-to-date profit & loss (P&L), throw in the current assets, and any good business advisor can assess the business’s cash flow in ten minutes.  The business advice can come in the form of help from one of many SBDC office locations throughout Washington State.  MBDA Center-Tacoma has partnered with John’s local chapter of SBDC in Tacoma to help serve businesses that come to MBDA to help them with growing their business.  

You can watch the video below for John’s full presentation about why cash flow is important and the basics that every business owner must know to calculate cash flow. 

video courtesy of UW Tacoma and VIBE

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