Tag Archives: cash

Why Cash Is King

Employment was pretty much the theme of Episode 30 of the podcast, All About The Beer @ Ignition Brewery which was all about Nick O’Shea’s experience setting up Ignition Brewery. One of the things he seemed disappointed about was the lack of support from charitable enterprises, especially as many of their aims were similar. In particular, his experience was that although the people who run charities have a lot to give, they are probably not the best people to run businesses.

There are three main rules for running a business – something I’ve learned through experience over the past 18 years. The theory of these rules come to me from a variety of sources including  John Davies a UK based financial adviser, but I’ve also come to know them through trial and error: the errors mostly coming from not sticking to them! And I wanted to share them in case anyone is thinking of starting an enterprise, like Nick did,  to help our young people with additional needs.

Rule 1: Cash is King
Cash pays for everything. It pays rent for premises. It pays suppliers for products or services a business produces. It pays staff, even if some are volunteers not all will be. It pays for the water, electricity and gas the business uses. In short, if there is no cash, there is no business, because a business cannot survive without cash. Profit is neither here nor there if there’s no cash. No cash brings a business down immediately, whereas no profit brings down a business more gradually.

Rule 2: Always Cash is King
Everything needs to be converted into cash. Think of stock on the shelves as something that needs to be converted into cash. If it is sitting on the shelf it is not cash, it is a dust collector. It cannot earn the business money if it is idle, doing nothing. This means we need to convert everything into a cash value to remember that while anything is stuck on the shelf it cannot be spent. This could equally be said for services provided; while they are not being provided, they are not a service. At some point in every organisation there needs to be someone who can master numbers. Without numbers cash is just theoretical. Theory doesn’t keep a business going, cash does.

Rule 3: If in Doubt, Refer to Rules 1 & 2
Cash is always, always king. While these rules might be a bit flippant, everyone wants businesses that employ people with additional needs to succeed. The key points to setting up something to help is to remember that cash keeps businesses up and running. Every business needs someone who is more than good with numbers, someone who can master numbers. Having a business with stock on the shelf or a service that is not given is a disaster waiting to happen. Hats off to anyone as good as Ignition Brewery, not only getting their products off the shelves but also paying the London Living Wage.