Scaling Up Business with Bill Gallagher 285: Michael Hsu — Cash Forecasting Best Practices
A lot of entrepreneurs do not understand their finances very well. You can be good at math, but bad at money! Today’s guest breaks down how you can be intentional with this piece so you can scale up more effectively.
Michael Hsu has spent the last 10 years working with entrepreneurs and educating them on financial literacy. He has turned his years of knowledge into a methodology called MEASURE x HACK, which aims to not only give someone financial freedom but help them intentionally create a successful business (and lifestyle).
The world of cash management and cash forecasting is incredibly murky. How do you realistically predict what you’re going to make before you make it? As CEOs of a company, you simply cannot be emotionally affected by the day-to-day operations of the business. Money, and lack of it, severely impacts your ability to think big-picture and long-term.
Michael isn’t sure if we willfully choose not to see the cash flow warning signs or if we simply are unable to see them. So many times an entrepreneur will celebrate the big wins, but then be completely broke the next month after sales drop slightly. There’s no reason to put your business through that kind of roller coaster.
Bill remembers an example of when his business was profitable. He was doing really well, and then one day his CFO said he had to personally loan the company money so that they could cover and pay all their taxes. Bill was stunned. How was the company doing so well on paper but they still couldn’t afford to pay the company taxes?
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Sponsored by: Bit.ly/clariontech
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Scaling Up is the best-selling book by Verne Harnish and our team for Gazelles Coaching, on how the fastest-growing companies succeed where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business Podcast and a leading Gazelles Coach. Gazelles is the term we use for fast-growing companies.
We help leadership teams with 4 Decisions around People, Strategy, Execution, and Cash so that they can Scale Up successfully and beat the odds of business growth success. Scaling Up for Gazelles companies is based on the Rockefeller Habits 2.0 (from Verne’s original best-selling business book, Mastering the Rockefeller Habits).