In my last post, we discussed how important it is to focus on whether the customer will pay their bill, rather than just focusing on whether the customer issued a purchase order or signed a contract.
This by definition will bring cash in the door. But that also isn’t the right end goal – it’s the net cash that’s important, after the expenses are paid.
Again, business owners will often focus on the sale/cash in the door, while not focusing an equivalent amount of time on the cash going out the door to fulfil that sale. I’ve spoken to business owners with 5-10% gross profit margins. With the level of risks business owners face today, that’s usually not a business worth getting up for. Often business owners just make sales for the sake of the sale (which might make sense for a specific purpose, but it has to be a pretty sound business decision….).