{"id":363,"date":"2017-12-11T02:55:21","date_gmt":"2017-12-11T02:55:21","guid":{"rendered":"https:\/\/craftbreweryfinance.com\/oldversion\/?p=363"},"modified":"2020-09-24T10:57:59","modified_gmt":"2020-09-24T14:57:59","slug":"the-ultimate-guide-to-cash-flow-for-craft-breweries","status":"publish","type":"post","link":"https:\/\/craftbreweryfinance.com\/oldversion\/the-ultimate-guide-to-cash-flow-for-craft-breweries\/","title":{"rendered":"The Ultimate Guide to Cash Flow for Craft Breweries"},"content":{"rendered":"<p><img decoding=\"async\" class=\"alignleft wp-image-88 size-thumbnail\" src=\"https:\/\/craftbreweryfinance.com\/oldversion\/wp-content\/uploads\/2017\/03\/BBF-Dollar-pic-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/craftbreweryfinance.com\/oldversion\/wp-content\/uploads\/2017\/03\/BBF-Dollar-pic-150x150.jpg 150w, https:\/\/craftbreweryfinance.com\/oldversion\/wp-content\/uploads\/2017\/03\/BBF-Dollar-pic-75x75.jpg 75w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/>\u201cThe most important word in the world of money is cash flow.&#8221; -Robert Kiyosaki<\/p>\n<p>Quick: What was your cash flow last month? How about for the year to date?<\/p>\n<p>I&#8217;ve worked with numerous companies over my career and almost <strong>no one has any idea what their cash flow looks like<\/strong>. Most folks look at the bank account and if it looks OK they figure cash flow must be OK.<\/p>\n<p>This is wrong and it makes me sad.<\/p>\n<p>I want you to avoid the cash flow problems that have befallen so many breweries. So, I&#8217;ve put together The Ultimate Cash Flow Guide for Craft Breweries.<\/p>\n<p>To give you a summary of what to expect in the guide, below is a recap of the key points:<\/p>\n<ol>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\"><strong data-redactor-tag=\"strong\">Know The 10 laws of business.<br \/>\n<\/strong><\/span><\/p>\n<ul>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Law #1: Don\u2019t run out of cash. Law #10: Don\u2019t run out of cash. All the rules in-between don\u2019t mean crap.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\"><strong data-redactor-tag=\"strong\">Understand the difference between profit and cash flow.<br \/>\n<\/strong><\/span><\/p>\n<ul>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Most importantly, understand that there is a difference and it can be very large. Profit is good, but is only one component of your cash flow.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\"><strong data-redactor-tag=\"strong\">Transform your company by leveraging the Five Drivers of Cash Flow:<br \/>\n<\/strong><\/span><\/p>\n<ul>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Accounts Receivable (money in). It\u2019s where your sales dollars live until you collect.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Accounts Payable (money out). It\u2019s where your purchases live until you pay the bills.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Inventory. That\u2019s cash on the shelves, not just beer, so treat it as such.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Capital Expenditures. Trucks, equipment, and brewery expansions, oh my.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Operating Performance (profit). The bottom line. Your P&amp;L only tells part of the cash flow story.<br \/>\n<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Note that 4 of 5 cash flow drivers above live on your balance sheet (not P&amp;L). This is a helpful reminder to give your balance sheet some love. Have your finance people provide this information to you on a regular basis \u2013 your cash flow depends on it.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\"><strong data-redactor-tag=\"strong\">Implement this simple system to manage your cash flow drivers:<\/strong><\/span>\n<ul>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Know the score. Use a metric to track how well you are doing with each cash flow driver. For example, the number of days sales in inventory.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Educate your team on what the metric is, and how it\u2019s calculated. Show them how they can make a difference and improve the result.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Set a goal to improve the score, the metric. Use industry benchmarks, or benchmark against past company performance. Communicate the goal to those who can influence the outcome.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Monitor the score, track progress towards the goal, and provide regular updates to your team.<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\">Celebrate the win. Free beer works well here.<br \/>\n<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\"><strong data-redactor-tag=\"strong\">Ask this question of yourself regularly: \u201cWhat did I do today to improve cash flow?\u201d<\/strong>\u00a0Examples: visit a key customer and say thank you, review product margins to improve operating results, cut an un-necessary expense, provide financial training and education to your team.<br \/>\n<\/span><\/li>\n<li><span data-verified=\"redactor\" data-redactor-tag=\"span\" data-redactor-style=\"font-size: 16px;\"><strong data-redactor-tag=\"strong\">Hire people who care.<\/strong>\u00a0This is obvious, right? But we often hire people who have the right experience, background or education. Find and hire people who care, people who are dialed-in to what they are doing. You want someone who is excellent at collecting money? Hire someone who\u00a0<i data-redactor-tag=\"i\">loves<\/i>\u00a0to collect money (because most people don\u2019t). You want someone who is great at managing inventory? Hire someone who\u00a0<i data-redactor-tag=\"i\">loves<\/i>\u00a0to be with the inventory, to count it, to communicate and sing the praises of it. Hire people who care.\u00a0<\/span><\/li>\n<\/ol>\n<p>Cash flow is the life blood of your business. Without cash, you are dead in the water.<\/p>\n<p><b>Craft Brewery Financial Training Members:<\/b><span style=\"font-weight: 400;\"> To get the Guide, Log In to your account and access the Online Courses from the Member Menu.\u00a0<\/span><\/p>\n<p><b>Not a member yet?<\/b><span style=\"font-weight: 400;\"> Sign up and get <\/span><a href=\"https:\/\/craftbreweryfinance.com\/oldversion\/downloads\/craft-brewery-finance-annual-subscription-plan\/\"><span style=\"font-weight: 400;\">instant and unlimited access<\/span><\/a><span style=\"font-weight: 400;\"> to Craft Brewery Financial Training online courses, resources and guides.<\/span><\/p>\n<p>Yours in Ultimate Cash Flow.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cThe most important word in the world of money is cash flow.&#8221; -Robert Kiyosaki Quick: What was your cash flow last month? How about for the year to date? I&#8217;ve worked with numerous companies over my career and almost no one has any idea what their cash flow looks like. Most folks look at the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":88,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pgc_meta":"","_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[63,77,64,70,65],"tags":[],"class_list":["post-363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial","category-financial-courses","category-financial-guides","category-financial-newsletters","category-financial-resources"],"_links":{"self":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts\/363"}],"collection":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/comments?post=363"}],"version-history":[{"count":0,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts\/363\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/media\/88"}],"wp:attachment":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/media?parent=363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/categories?post=363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/tags?post=363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}