Those who...
1. Track everything
2. Track nothing
Whether ignorance or information overload - neither is ideal.
Instead, choose fewer, but more meaningful KPIs.
The #1 reason a company fails:
Cash flow issues.
Track this metric to thrive:🧵
Those who...
1. Track everything
2. Track nothing
Whether ignorance or information overload - neither is ideal.
Instead, choose fewer, but more meaningful KPIs.
The info can be applied to:
1. Finance
2. Operations
3. Customer Management
One centralized KPI keeps departments working together.
The best part?
It's centered around cash.
The time (in days) it takes a dollar to go from product or service to cash in the bank.
Note: CCC is used for inventory investments, but the service equivalent is called:
Service-to-Cash Cycle.
Same principles, so we'll use CCC for simplicity.
In days, and...
Above 0 = longer to sell & collect cash than to pay vendors.
Below 0 = faster to sell & collect cash than to pay vendors.
The lower, the better.
Higher numbers indicate current or future cash flow issues.
How is it used across departments?
Strong CCC means there is cash to fuel growth.
Without it, growth must be financed.
It's risky - with larger receivables, comes larger payables.
When bills are due & there's no cash...
You know what happens.
Make cash collection a priority & finance teams can analyze new opportunities instead of restructuring debt.
Collecting cash quickly is a function of operational efficiency.
Product/service, sales, A/R, & A/P teams must be working together with accurate and timely information.
This is easier said than done.
Low CCC = effective management.
Getting great payment terms from customers & vendors requires quality relationship management.
Consistency, reliability, & being liked will dramatically improve the cash position.
Treat them well and be clear with expectations.
Extremely.
Harvard Business Review credits a negative CCC for Amazon's survival of Dot Com bust.
By collecting before spending, sustainable growth was possible.
Competition was financing product purchases, hoping to collect.
A viscous cycle.
With my SEO company, Bright Line Media, I collect cash 21 days before I owe vendors.
It wasn't always this way.
I once paid a vendor 2X before getting paid and it prompted change.
Here's what I did:
1. Payment date to the 5th
2. Must pay via Stripe
3. NO physical checks
Receivables, solved.
I negotiated better payment terms by always paying on time & promising to pay via ACH (no fees).
Payment Date 26th.
21 Days from collection to payment.
New sales enter into this cycle & never incur an out of pocket cost.
Quick Summary:
1. Don't overproduce / hire
2. Collect cash quickly
3. Set consistent payable cadence
4. Cross department communication
Build a healthy company - on the cash you're owed!
Follow me @barrettjoneill for more on business, growth, & SEO.
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1. IQ is one of the most heritable psychological traits – that is, individual differences in IQ are strongly associated with individual differences in genes (at least in fairly typical modern environments). https://t.co/3XxzW9bxLE
2. The heritability of IQ *increases* from childhood to adulthood. Meanwhile, the effect of the shared environment largely fades away. In other words, when it comes to IQ, nature becomes more important as we get older, nurture less. https://t.co/UqtS1lpw3n
3. IQ scores have been increasing for the last century or so, a phenomenon known as the Flynn effect. https://t.co/sCZvCst3hw (N ≈ 4 million)
(Note that the Flynn effect shows that IQ isn't 100% genetic; it doesn't show that it's 100% environmental.)
4. IQ predicts many important real world outcomes.
For example, though far from perfect, IQ is the single-best predictor of job performance we have – much better than Emotional Intelligence, the Big Five, Grit, etc. https://t.co/rKUgKDAAVx https://t.co/DWbVI8QSU3
5. Higher IQ is associated with a lower risk of death from most causes, including cardiovascular disease, respiratory disease, most forms of cancer, homicide, suicide, and accident. https://t.co/PJjGNyeQRA (N = 728,160)
