Why Profitable Companies Go Broke: David Safeer

Accounting Myths That Sink Small Businesses How to Forecast Cash Flow and Stop Guessing

Episode 254 (David is based in Salt Lake City, Utah)

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In this conversation we explore…

1. Why traditional accounting fails to protect small businesses.

2. How cash flow differs from accounting and why it matters more.

3. The danger of relying on profit and loss statements alone.

4. How to recognize early warning signs of cash trouble.

5. Why even profitable companies run out of money.

6. The mindset shift needed to forecast financial stability.

7. The power of the 13-week cash flow model.

8. How to calculate and build sufficient cash reserves.

9. The role of risk in financial planning and survival.

10. How strategic timing of payments protects your cash.

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About our guest David Safeer:

David has done business in over 40 countries. He restructured a Fortune 100 company from years of losses to profitability in one year.

He is known as the Unconventional Cash Flow Guy.

Improve your cash flow with a free copy of his ebook, "24 Profit Strategies for Business Success" at  http://cic60.com/

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Key Learning Points

1. Accounting ≠ Cash Flow: Accounting reports don’t reflect the cash available.

2. Cash Flow Conversations Are Rare but Critical: Business owners often focus on revenue/expenses and overlook cash movement.

3. Symptoms vs. Root Causes: Issues like payroll trouble often stem from deeper systems or margin problems.

4. The P&L Illusion: A profit on paper doesn’t mean there’s cash in the bank.

5. Modeling Is a Lifesaver: The 13-week cash flow model helps foresee challenges.

6. Mental Game of Money: Cash flow stress impacts decision-making and sleep.

7. Cash Reserves Save Businesses: A few weeks of reserves can prevent shutdown.

8. Cash Flow Needs Monitoring: Weekly modeling can prevent surprises.

9. Accountants Aren’t Always Experts in Cash: Many don’t understand or prioritize it.

10. Liquidity from Hidden Assets: Inventory and unused assets can become emergency cash.

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