According to David Birch, a gazelle is a company that has a minimum
of $100,000 in revenues and manages to grow at least 20% over a
four-year period. Only 3% of all companies have accomplished this
demanding task. Birch, who is credited with hatching the notion
that small rather than large companies are the engines of job
creation, says that a small company views profitability as variable
and quite manipulatable. But cashflow is a constant issue because of
fixed (payroll) expenses and overhead.
Positive cashflow equals business survival. But not all cashflow is
due to good management, and not all of it will help you survive
either. Accordingly, if you find that you have extra cash at the end
of the month, follow this five-step strategy:
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Determine the source of the your positive cashflow.
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Project future cashflow.
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Establish priorities for the cashflow.
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Research viable strategies and opportunities to generate more
cashflow.
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Choose the best strategy for your business and stick with it.
After all is said and done, positive cashflow comes from only four
sources: new debt, new investment, sale of fixed assets, and
operations.
The first three are limited. So if the fourth source, operations,
doesn�t kick in, then sooner or later your creditors pull the plug.
Make it your goal to go after one of the best sources for new
cashflow � working with your trade exchange counselor to cover more
of your company�s business expenses with trade dollars.
David Birch has a degree in applied physics and engineering from
Harvard. He spent his early career at NASA, working on the Hubble
Space Telescope and the Mariner space program. In 1983, Birch
started Cognetics, subsequently rechristened Arc Analytics � a
research and consulting firm in Waltham (MA).
