What do Zombies and Cash Flow Have in Common?

construction sign
Creative Commons License photo credit: underbiteman

Nothing, really, but I wrote this post and it was dull, dull, dull; correct and all that, but excruciatingly dull. So I decided to spice it up with … Zombies! You were thinking I was going to say sex? I’m not that interesting.

Editing Note: Zombie parts are grafted onto the original lifeless post for an authentic zombie experience.

Last time, we talked about the basics of cash flow and I gave you a quick test to tell how you’re doing. I asked you to take a minute from fighting off the zombie horde outside your fortified building to get your last six months (or as many as you have) bank statements and a piece of paper. If there’s no paper, just write on the walls. It’s not going to matter anyway once you’re a zombie too. Write down the ending balance for each month, in order.

Did you do it? Is the balance getting smaller or larger? Arguably, you won’t care as they eat your brains, but still, nice to know. (Zombie trivia: They don’t exclusively eat brains and will feast on any living flesh available.)

This is a rough – very rough – indicator of the health of your business. That is, unless it’s become a zombie business – a little known side effect of general zombie infection where companies continue to shamble along well past their expiration date.

What we’re doing is an overview and doesn’t substitute for a proper analysis but it will help point you in the right direction. For some people it may be all you need.

If not, let me know and I’ll help you get going with it.  Sorry, but I can’t help you survive a zombie apocalypse. You’ll need more stuff for that like The Zombie Survival Guide: Complete Protection from the Living Dead*,supplies and luck – really huge amounts of luck.

Unusual Expenses

If your cash is stable for most months and then dips suddenly, that usually means you paid unusual or infrequent expenses that month. Maybe you got a fantastic deal on supplies and bought six months worth of paper or your business license and insurance were all due in the same month. Perhaps you stocked up on survival supplies and paid a pretty penny for a sweet top of the line zombie preparedness system.

If the balance goes up one month and down the next, it’s more likely something was paid twice in one month and not in the next which might indicate you’re turning into a zombie yourself. But, try not to think about that too much, if you can still think.

Unusual Sales

Cash balances going up suddenly are often a sign of extra sales like you’d have from a show or large order. The flip side of that is a sudden dip in one month could be a drop in regular sales like you’d see if you took a few days off or some outside event, like a hurricane, a blizzard or an invasion of shuffling moaning zombies, killed your sales.

Escalating Expenses

More seriously, a downward trending balance may be due to expenses rising without corresponding sales increases. This happens when your materials and supplies cost more, overhead costs have crept up or maybe you’re buying too many lattes on the company till.

Dwindling Sales

The most serious cause of a steady fall in cash is declining sales. It’s the hardest source of cash to influence and has the longest lead time to change. If a zombie infestation is turning all your customers into staggering flesh eating creatures that don’t have the mental power to buy anything, it’s pretty hard to reverse that trend.

Now what?

Now that you’ve looked at your cash balance and given some thought to why it is what it is, the next step is to do something about it other than stumble around the place looking for snacks. We’ll talk more about that soon, when I’m feeling better. I think domrhinh is etonh … Errrrrhhhhh aaghhaaa …

What have you found out about your business so far and how do you feel about it? Let me know in a note or the comments, your thoughts are valuable to me. If you liked the zombies – let me know! If you thought the zombies were stupid – let me know!

If you’re looking at your numbers and getting a headache, let me help. I can bring focus and clarity to the jumble of figures and give you real next steps to take. I specialize in reassurance. In a calm non-zombie like way.

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