Updated: Feb 10
In this article, I will explain what does cash flow tell you for individuals and businesses.
What means when the cash flow is positive for individuals and businesses?
Positive cash flow means the same thing for both individuals and businesses that things are going well overall but this is not an exact measurement. This does not mean that there is no room for improvement, it only means that the direction is good.
Like at hockey, if you win with 6-5 it is a win, but not a fantastic win, mostly you got lucky there.
A thorough analysis is recommended and a proper plan implemented.
What means when the cash flow is negative for individuals?
This is very bad because it puts you in a situation when you might lose assets, having trouble getting loans at good credit ratings, also.
In order to avoid this, you might want to have a plan of having put money aside for emergencies, having HELOC opened, and personal lines of credit opened, and maybe even BOY before you have all the negative cash flow happening.
What means when the cash flow is negative for businesses?
Could be a little bit different for businesses because sometimes you need to invest in marketing and promotion and this might affect your cash flow but improve your overall business and future cash flow.
The concern is when it is negative for a prolonged time. You could have trouble getting loans from the banks as well. The same things apply here and better be prepared with emergency money, opened lines of credit, and maybe also BOY.
Feel free to contact me if you need help with improving your overall cash flow or with BOY strategy to implement for individuals and businesses: