Managing for Bottom Line Cash Flow, Part Two
In yesterday’s post, I laid out the following proposition:
In the world we now live in, financial health requires a commitment to proven retail business fundamentals, a commitment to operational discipline, and a heightened attention to detail.
Whatever the business environment, their are retail fundamentals that will maximize the bottom line, that drives positive cash flow.
Think of a funnel.
Everything about a retail business goes into the top of the funnel, from the store itself, the merchandise, to the store associates, even the customers themselves. Sales go in to, as well as all of the technology, systems, strategies and initiatives that are adopted along the way. Everything and anything that’s associated with the business. All of that is the input.
The output has to be positive cash flow. Has to be. With positive cash flow all things are possible. Without it, as too many retailers have learned in the past few years, is an abyss.
The funnel itself represents the practices, processes and procedures of the business. And to maximize the cash outflow at the bottom of the funnel, regardless of the economic environment, requires owners, CEO’s, senior managers and everybody else involved in the business to be proficient in core retail fundamentals and disciplines. And with the environment that we now live in, maximizing cash outflow has taken on even greater urgency.
So, what are those fundamentals? I’ll take them up, one by one, beginning with my next post.