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Your P&L shows profit. Your bank account shows stress. What's the disconnect?
Steve Coughran, author of "Cash Flow" and founder of Coltivar, delivers a masterclass in retail cash flow strategy that every independent retailer needs to hear.
The problem isn't passion or effort. It's operating in the cash flow fog — running a business without understanding how cash actually flows through it.
Your income statement is lying to you. You can show $100,000 in profit while having $10,000 in your bank and pulling on your line of credit to make payroll. That's the difference between profit and cash flow.
Steve breaks down the complete framework:
THE SEVEN LEVERS OF CASH FLOWVolume, price, COGS, operating expenses, working capital, risk, and strategy. These are the specific levers you can pull today to improve your cash position.
THE CASH CONVERSION CYCLEIf you're holding 60 days of inventory but paying vendors in 30 days, you're self-funding 30 days of working capital out of pocket. Steve walks through the exact calculation and how to close that gap.
THE VOLUME TRAP"We can shave a few margin points and push volume up." Steve destroys this myth with math. Chasing volume at margin's expense scales your problems, not your business.
INVENTORY AS A CASH KILLERYou're taking money out of your bank and putting it in a box on a shelf. Excess inventory strangles cash flow. Steve explains how to use ROIC to know if you're turning inventory fast enough.
WORKING CAPITAL REALITYAmazon collects customer payments immediately, pays suppliers on the back end, funds growth with other people's money. You can do the same by matching inventory days to vendor payment terms.
STRATEGY AS INTERRELATED DECISIONS"Strategy is not an exercise. It's a set of interrelated decisions about where your company will compete, how it will compete, and how it will win."
You can't sell high-end products in a terrible store. Every decision has to fit together.
THE MINDSET SHIFT"You have a fiduciary responsibility to protect the assets of your business. You can't say 'I'm not a numbers person.' Too many people depend on you."
The mindset shift is the mindset shift.
This conversation gives you the exact calculations to assess cash health, the levers to improve it immediately, and the strategic decisions that separate businesses from assets.
Steve Coughran: Coltivar.com | "Cash Flow: How to Build a Great Company That Endures in Tough Economies and Thrives in Booming Ones"
Anonymous Retailer: AnonymousRetailer.com
