If you ask most business owners in Kerala what their biggest worry is, they'll say something like ‘Sales are slow’ or ‘Margins are shrinking.’ But there’s something even more critical that often gets ignored—cash flow.
And the irony is, many businesses that shut shop weren’t unprofitable. They simply ran out of cash at the wrong time. Very recently I spoke with a business owner who is doing well but he said that his growth was being stifled due to lack of funds.
Cash flow, in general, refers to payments made into or out of a business, project, or financial product. It can also refer more specifically to a real or virtual movement of money.Cash flow determines the amount of cash consumed or generated for a specified period. Its analysis also identifies the existing sources of the flow of cash along with a possible scope of inflows.
--Vivek, who runs a custom furniture unit near Palakkad, was thrilled with a ₹50 lakh bulk order from a resort. But the client insisted on 60-day payment terms. Vivek had to spend on raw material, wages and factory running costs immediately. A month later, he found himself borrowing money from friends just to pay salaries.
--A popular gym chain in Kottayam ran a summer offer with EMI-based memberships. They got 250 new clients at their 8 outlets. While the numbers looked good, real cash wasn’t coming in fast enough. Trainers had to be paid, electricity bills mounted, the building owners demanded rent for the space hired and equipment maintenance couldn’t wait. The owner had to dip into personal savings to keep the lights on. The business wasn’t working to keep itself fit.
--A Thiruvananthapuram-based software company completed a ₹50 lakh project for a Dubai client. Meanwhile, the annual server cost and license fee for the software was due. The entrepreneur had asked for any upfront amount to get the project going. With no buffer, the company had to put new projects on hold.
Each of these businesses was doing well in terms of sales. But they hit a wall because cash wasn’t available when needed. Your business might be profitable on paper—but if cash inflows are delayed and outflows can’t wait, the business was heading into bad weather. Healthy cash flow means having enough working capital to handle day-to-day needs without stress.
Here's a quick comparison of good vs bad cash flow:
--Keep a weekly cash flow tracker--know what’s coming in and going out.
--Don’t delay invoices. Bill promptly and follow up politely.
--Ask clients for advance or milestone-based payments.
--Keep setting aside a small reserve fund—even ₹50,000 or 1 lakh per month adds up.
--Use simple tools—Excel, Google Sheets or cash book apps.
If you'd like a simple cash flow tracking template that you can use immediately—no software or finance degree needed—just write to us. We'll be happy to share a copy.
Think about this:
- Do you track your cash flow regularly? If yes, how often?
- Do you have checks in place to stay cash-flow positive every month?
- Is your cash flow healthy enough to fund growth or pay yourself from the profits?
Cash flow isn’t a finance term—it’s the lifeblood of your business. Manage it well, and you’ll always have room to grow.
