The Lifeline of Business: Understanding Cash Flow

By Kariuki

Cash flow is the heartbeat of a business, ensuring survival and growth. It represents the movement of money in and out of a business, covering expenses, salaries, and investments. A positive cash flow allows stability and expansion, while negative cash flow can lead to financial distress and even closure.

Key factors affecting cash flow include poor planning, delayed payments, excessive debt, and unexpected costs. To maintain healthy cash flow, businesses must budget, forecast, and build cash reserves. Efficient invoicing, cost control, and favorable supplier terms also help sustain liquidity.

According to Esther Muchemi, CEO of Samchi Group, “Cash flow is the lifeline of sustainability and growth. Entrepreneurs must master financial discipline to withstand economic turbulence.”

Regularly monitoring financial statements and adjusting strategies ensures business resilience. Simply put, a business is only as strong as its cash flow. Protect it, and success will follow.