As Business owners, have you encountered the following scenario;

1. Always need to constantly putting your own money to finance the business/operations?
   1. Your Sales is 2x of last period but still you need to find funding for your business operation?
   1. You know your company is making nett profits but your bank book is always in the red?

Have you ever wonder what is the reason?

Notes:

1. There are a whole bunch of lists that would land you in the above scenario, what is listed here is not an exhaustive list but common reason;
   1. Owner/Partners keep withdrawing money from business/operations. -> You’d probably say company belongs to me so I can withdraw the money as & when you want. This is the mindset of most traditional entrepreneur, which in a way is WRONG. Always maintain a separate sense of “belonging”; whatever is in the Company belongs to the Company. If you need to withdraw the funds from the Company, then make it a habit of paying yourself a salary.
   1. Wrong price point. Most probably you didn’t incorporate your own salary when determining the sales price & hence you still wont achieve profits even you have higher sales.
   1. You could have high inventory/stock level.; which means all of your cash are being tied up in the form of these stocks.

You could have high debtors with long outstanding overdues; which means all of your profits are temporarily “kept” by your debtors. Situation gets worsen if it turns into uncollected debt where your profits turn into loss