Cash is the lifeblood of any business, and it's especially important for companies that are scaling. As our businesses grow, we need more cash to fund our growth initiatives, not to mention stay afloat. That's where the Cash Conversion Cycle (CCC) comes in.

The CCC is a metric that measures how long it takes to convert investments in inventory and other resources into cash flows from sales. In other words, it tells us how many days it takes for our business to get the first dollar back after spending it. The lower our CCC, the faster we're converting our investments into cash, and the more cash we have available to grow our business. A win-win.

Take a second to think about where your business stands…How long does it take for YOUR BUSINESS to convert your investments into CASH from sales?? Do you know the answer?

If your company is struggling with cash or you’d like to improve, you’re not alone. A 2019 study from Intuit found that over 60% of small businesses struggle with cash. Let’s be leaders in this and get a handle on our cash…

In the Cash Acceleration Strategies (CASh) exercise, we brainstorm ways to improve each of the following four cycles, which ultimately improves our CCC:

The Sales Cycle
The Make/Production & Inventory Cycle
The Delivery Cycle
The Billing and Payment Cycle

Within these buckets, we come up with solutions that either 1) Shorten Cycle Times, 2) Eliminate Mistakes or 3) Improve our Business Model / P&L.

If you really want to improve your cash position, you and your team should spend an hour (or more) every month to discuss each of these components.

Then, choose one initiative per quarter and make it your PRIORITY!

Regardless of your current CCC, you must continually evaluate and discuss the processes surrounding these cash sensitive activities. There is always room for improvement, and we must be equipped to weather any unknown that comes our way.

If you're serious about scaling your business or cash flow is keeping you up at night, I encourage you to take a close look at your CCC and this exercise. It has helped countless businesses shorten their CCC, improve their financial health, and crush their business goals.

Don’t wait…Every day you save on your CCC is another day you can invest in your business's growth!

Click here to download the CASh exercise.