![]() ![]() Using your financial statements, here’s the formula to use to figure out cash flow: “The higher the cash flow ratio, the better.” “This means the company can afford to pay its liabilities twice,” he says. The goal for a cash flow ratio should be 2-to-1, advises Mike Ornelas, author of How to Profitably Market Your Business. ![]() ![]() “Understanding when their debt and expense payments are made, and how that lines up with their income streams is vital to the success of pretty much every small business.” “Small businesses need to understand their cash flow more than anything else,” says Jeff White, a finance writer at Fit Small Business. Without it, you can’t grow, invest in or market your studio or gym. It’s what allows your studio or gym to pay employees, operating expenses and more. Here’s what you need to know to get better picture of your studio or gym’s financial health: Cash Flow is KingĬash is the lifeblood of small businesses. We asked a few small business experts what to look for when analyzing your financials. The only way to get a clear picture of your studio or gym’s profitability is to do a deep dive into your financial statements, and there are a number of expenses you can and should be tracking. How much revenue is your studio generating? How much money are you putting into the business? Not being able to answer these questions is like flying blind. When you’re running a fitness studio or gym, one of the most important ways to measure your success on an ongoing basis is to analyze your financial statements. ![]()
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