by Dr Greg Chapman
So you have a ‘Cashflow Problem’ and you want to fix it, but first we need to ask a question. What is the cause of the problem? You see a ‘Cashflow Problem’ is just a business symptom and we need to diagnose the cause before we can treat it. If left untreated, it turns into accumulated debt, a rather more advanced symptom.
There are two basic causes:
1. Insufficient sales
2. Margins too small to cover costs
In the first case, the margins may be ok, if only you were able to make sufficient sales, but why aren’t you making sufficient sales? Is it that: