Only 7% of You Have Your Cash Flow Under Control

Recently, we've been discussing results from 75 people who have taken our Ecommerce Business Performance Assessment.

Today we're talking about the Cash Flow & Cash Position section.

• 7% scored high

• 71% scored in the middle

• 23% scored low

Here's what that means.

93% of you are either struggling with cash or barely keeping your head above water.

In real life, those scores look like this:

Low scores

You're barely covering your bills, if you're able to pay them at all.

You don't have any real cash left over.

When something unexpected hits (ex. a slow month, a supplier payment, a platform holding funds) you're left scrambling.

You're not reviewing expenses on a schedule and wouldn't know what to look for if you did.

You might not even have separate bank accounts for different parts of your business.

There's no way for you to tell which products are actually making you money vs ones that are actually costing you.

Medium scores

You're paying your bills.

Maybe you have a little cushion of cash set aside.

But it's not comfortable. It's not enough to keep your business running in case of emergency.

You're not sitting on 3-6 months of operating expenses.

You review your spending occasionally, but not enough to be on top of it.

You probably have a general idea of which products are profitable, but you haven't done the math.

You've got some debt, but you're not sure if you're using it strategically or just because it gives you that little bit of cash cushion.

High scores

You're dialed in.

You have real a real cash savings, enough to weather a bad quarter without panicking.

You review expenses like clockwork and know where every dollar is coming and going.

You have dedicated bank accounts for different purposes.

The profit margins are calculated by product and decisions are made accordingly.

When debt is used, it's planned with strategy, not desperation.

What worries me about these numbers is that poor cash flow management is what kills ecommerce businesses.

Not bad products. Not competition. Running out of cash.

And I'm seeing that most of you are operating without enough cushion.

You make enough to keep going, but never enough to get ahead.

One bad month, one inventory miscalculation, one unexpected expense, and you're straight into the red.

That's not a sustainable way to run a business, that's just surviving month to month and hoping nothing goes wrong.

The 71% of you in the middle?

You aresoclose. You've got revenue. You're covering expenses.

You just need to build some habits that help you actually managing that cash instead of just hoping it works out.

Start reviewing expenses monthly.

Build up that cash cushion, even if it's $500 a month to start.

Dig into your products, find out which ones are actually profitable.

Get your accounts organized so you can see what's happening.

Because right now, you're just one bad quarter away from a crisis.

You don't have to be.

Want to see where you stand?

Take the Ecommerce Business Performance Assessment

Because crossing your fingers is not cash flow management.

Cyndi