Make Your Business Profit and Get Free Cash Flow

Free money flow (FCF) is the money that is available for a business to distribute to investors or reinvest in to the business. The availability of this money is the result of the business receiving profit from products & services. After taking in profits, the business still must pay its taxes & the cost of doing business (operating cost). This left-over money is called the FCF for the business. As an entrepreneur, it is important that you focus on achieving free money flow so that you can grow your business. There is not entrepreneur that desires to run out of funds.

To calculate free money flow you must subtract the cost of doing business from your profits. As a simple example:

Company A buys a widget for $25, sells the widget for $100, & barring any operating expenses & taxes the company has a free money flow of $75. If there's capital expenditures (money necessary for current operations), then you subtract that amount from the profits. So if the cost of doing business was $20, the FCF is reduced to $55.
FCF is of the most standard measurements to check the financial circumstances of a company. A positive FCF shows that a company can save money even after all expenses. Even a negative FCF can indicate that a company is making large investments, which can have potential for high returns in the long-term. Also, FCF allows a business to increase value by introducing new products, paying stakeholders, & repaying debts. FCF is comparatively simple to understand business idea & is a great indicator for the health of a business.

The way a business is organized has a essential effect on its financial structure; thereby, affecting its free money flow. A company's finances & its operations are absolutely connected. In order to maximize on free money flow, your business must either increase profits or decrease cost. Having the proper business method in place is a vital element necessary to accomplish a value chain that both produces high profits & low operating cost.

For Investors, free money flow represents that amount of capital your business can distribute among stakeholders. Investors don't get paid with earnings -- they get paid with money. Profits do not equal money flow.

The business method that you select is the guide for your safe passage from the left side of the CASHFLOW Quadrant to the right side. This journey will progress as you acquire a method to make your business operations smooth while generating high profits & low operating costs. It is your bridge to financial freedom & a way to "Create Your Own Lane" in business success.

As an entrepreneur, you must start with the finish in mind. Now in the Information Age, you can set you aim on generating an automatic vehicle for generating money without consuming time. The Information Age allows information to get powered by know-how & low-cost resources like silicon to produce wealth. This means that the ability to generate free money flow for the entrepreneur has greatly increased. FCF is available to any business that is willing to (one) build a method, (one) buy a method or (six) attach to a method. The aim is to own a method & have people work that method for you.