Monthly Archives: January 2023

Are you proactive or reactive in your planning? Having a long-term strategic investment plan is a key element of creating wealth. Are you likely to create a high value business by responding to pressing needs? There are many competing demands for capital investment in every business. These include: The need for more capacity The need to reduce costs of production/delivery (e.g. automation) The need to have a deeper knowledge of the drivers of profit The need to create new product/service lines The need to enter new markets The need to make acquisitions If these demands are addressed [...]

What you are told Anyone who reads business advice has heard the saying “Revenue is vanity, profit is sanity, but cash is king”. You will be told “Cash is King” time and time again. Political campaigns have been condemned because of the use of “three-word slogans”. This is a three-word slogan. Yes, there is some merit in it. But the danger is that it will cause management to place too much focus on the short-term management of cash reserves. The reality We need to reinforce the reality. Cash is not King. It is the complete opposite. It [...]

Why working capital will grow If you are a growing business, you will be experiencing increasing demands to fund higher levels of working capital. Some businesses have a higher working capital burden than others. For example, manufacturers may carry high levels of inventory as well as high levels of receivables. Service companies will generally have a lower level of working capital, but it is still a funding issue. The ceefo Wealth Engine program forecasts working capital growth over a 5-year outlook period. Our clients are always surprised at how much additional capital will be required to fund [...]