Cash is king to business (Profit is vanity and the importance of cash)

Cash Is King for all businesses and turning profits to cash at the bank is the key to a successful business

Why cash is king in business in 15 seconds…

Cash is king for all businesses and is a phrase often used in business speak. The term reflects the belief that cash is more valuable than anything else in business. It’s true to say that cash is king and profit is vanity, as profits not converted into cash are useless to any company. The cash is king full saying: Turnover is vanity and profit is sanity, but cash if king.

We’ve heard the saying ‘Turnover is vanity whereas profit is Sanity’, but if you have the profits and you neglect to collect amounts owed by your customers, your business will fail or it will certainly struggle.

Each month that goes by and you don’t get the money in from your customers, your business is losing out on investment opportunities – so get a good system in place for making your business ‘Cash Flow Rich‘.

Cash is king full saying

The full saying about cash is king is as follows:

Turnover is vanity and profit is sanity, but cash if king. However, others use the term, cash is king, profit is queen. Whilst others even talk about how cash is king, profit is vanity.

What ever saying you know and like, it’s important to understand that cash is the most important ingredient for all businesses.

Have a great team in your business

A key to this process is having a great team around you that understand what you are looking to achieve in your business.

A part of this great team should be people that understand the importance of having a great ‘Customer Service Experience‘. Great Customer Service is a good grounding in business to make sure you have happy customers and happy customers are more likely to pay in full and on time!

Preparing plans for at least the following 12-months is an important part in running a successful business also. This will help you to budget for your various costs, forecast what sales you plan to make and what level of margins you hope to achieve. This is both in terms of Gross Profit Margin and Net Profit Margin.

Once you have set these – you have a target to aim at to make sure you run a great business.

What is the meaning of cash is king?

Cash is King has been explained on Wikipedia too and talks about the importance of sufficient cash as an asset in the business for short term operations, purchases and acquisitions.

Also, we have written a white paper on cash is king, which can be read by clicking on this link – cash is king white paper.

Quotes on this subject include one of my favourites:

‘The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.’
Chris Chocola

Preparing business plans and cash flow forecasts, which might be simply to begin your next years planning process or it might be to show to your bank, your shareholders, or potential investors, in preparation for an expansion or loan requirement. So having good business software in place is key to this process.

I hope you enjoyed this article about why cash is king

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