Skip to main content

Become Financially Intelligent or become a Slave.



One of my consulting clients recently asked me, "What is the leading cause of business failure or organisational collapse? 

Research by many prestigious institutions like Dunn & Bradstreet show that the leading cause of organisational failure is bad cashflow management.

Even hard work, sincerity, passion, talent, technology, great products, good markets etc. cannot save an organisation which has poor cashflow management.




Sales is Vanity,
Profit is Sanity,
Cashflow is Vitality.
__________________________________________________





What is cashflow?
Simply explained it is the amount of cash that actually flows in and out through the accounts of a business. It represents the liquidity of funds within a business and in a sense the fuel that allows the business to keep running.


_______________________________

Tiny or very large, more than 85% of all enterprises that fail globally, do so because they were unable to manage cashflows effectively.






As a consequence  of neglecting cashflows or starting with too little money, many honest, sincere, talented, hardworking people with good products and services become bankrupt. Lenders lose money, but owners lose everything, including their sanity. Many land up facing harrowing litigation, and also endure social disgrace.

Research shows that more than 70% of all businesses have no idea about the actual details of their financial situation other than their bank balance. Accounting may be boring, but failure to plan and implement your finances can be fatal. 

It is Unfortunate that in our education system we teach people thousands of topics but rarely do we not teach the vital life skill of 'Financial Intelligence'.  That is the ability to understand fundamentals of money, cashflow, banking, taxes, insurance, savings, investing etc.

You may ask, "Why do I need to know about cashflow?"
Everyone needs to know about cashflow, because, the same issues effect that affect organisations also affect individuals in their everyday life.

Individuals or organisations, the inability to understand and respect the natural laws of finance and commerce inevitably leads to indebtedness and financial slavery from which escape is next to impossible.

Comments

Popular posts from this blog

Last thoughts and words of Emperor Aurangzeb

The 6th Mughal emperor of India, Aurangzeb was a brave but cruel man. While he was an excellent military leader, he was a weak administrator with poor understanding of economics. As a result he landed up being dependent on corrupt, fanatical people who only hungered for power and wealth.

Aurangzeb's lust for power was insatiable. In this quest he spared no one, imprisoning his own father, and slaughtering his brothers and nephews. He inherited an expanding empire which permitted him to rule the largest area of the Mughal empire's history, before he led it into decline. 

He felt that his actions had probably made him repugnant to the people and his legitimacy to rule would always be questioned. So he adopted a frugal life style and tried to be a good Muslim to appease the powerful clerics, soldiers, noblemen and the muslim public, which would allow him to rule effectively.

Like many other misguided men he came to believed that Islam meant only violent, subjugation and persecution.…

False opinions are like false money

False opinions are like false money, manufactured first of all by evil men and thereafter circulated by honest people who perpetuate the crime without knowing what they are doing.


 ~ Joseph De Maistre