Free Cash Flow begins with revenue.
You may make a cash sale, but that is just the start.
And, frankly, revenue is almost never cash.
Take a credit card, cut an invoice. Yes, accounting revenue is produced.
But it isn’t cash until it hits your bank account.
And even then, not free cash flow.
You have other obligations.
Like paying your vendors.
And paying your people.
Over the next few posts, we’ll talk about the journey cash takes through your organization, and the strategic questions at each stop.
For example, with revenue:
- What strategic decisions led to a increase? New market share? Price increases? Increased customer retention? New lines of business?
- What strategic decisions led to a decrease? Discounting? New/Increased competition? Customer churn? Reduction in product SKUs?
- If revenue went up or down without a predetermined strategic driver, what now? Can/Do we lean in? Could we retake control of our strategy?
Now go spark that revolution.