Essay on The Cash Flow Issues Within The Business

Essay on The Cash Flow Issues Within The Business

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SAJ Solutions focuses on the major cash flow issues within the business and provides an absolute Solution that perfectly fits to solve the issue. Here are some major reasons for the financial issues in the business:
 Increased competition
 Smaller pool of clients
 Loss of major contract or client
 Increased operating cost
 Major changes in industry
 Legal disputes with partners
 Force majeure (Natural Disasters)
 Various accidents
 Departure of important staff members
Therefore, here are the issues described in detail:

Not Enough Cash Flow
Cash flow is calculated by subtracting total expenses from total income. If the resulting number is positive, the company is making a profit, and is considered to "be in the black." If the resulting number is negative, the business is losing money and considered to be "in the red." Businesses with only modest cash flow may find it hard to expand their operations, and businesses with negative cash flow have even fewer options. If a business lacks the ability to create cash flow, it will be forced to take on debt to continue operations. Business loans can help a company restructure, retool, increase sales or expand into new markets. However, too much debt can sink a business permanently.
Too Much Debt
Too much debt can be harmful to a business. High credit card interest rates and large loan payments can raise your monthly expenses, and make it harder to turn a profit. Few banks will approve loans for businesses with too much outstanding debt. If a business reaches a point where the debts and liabilities outweigh revenue and cash flow, the business is deemed to be insolvent and bankruptcy may be the only recourse.
Poor Financial Management
All businesses, especially startups,...

... middle of paper ...

...o only spend the money that the budget allows them.
Conclusion and Recommendations
In conclusion, we would like to say that it is always important for businesses to manage their money properly to survive in the fast-growing market. There are lot of different ways that businesses can suffer and take a hit on their financial stability. We would like to recommend that businesses should always invest their money wisely whether the business is big or small, and also, whether the investment is big or small. The businesses of today should have budgets put in place for everything they do and always have a backup plan if something doesn’t go the way they planned. We also recommend that businesses should always have some money put aside, just in case something unexpected occurs within the business. These few ways could really help save a business from any kind of a disaster.

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