Shanli Liu, CPA, CTPFreedomfolio · I help 7 to 8 figure service business owners and ecommerce sellers keep 10K to 75K of profit- without IRS headaches | CPA. Virtual CFO. Tax Resolution Pro | $5MM+client tax savings | Book a free 15 min strategy call

Where to put CASH to make more CASH...

Name: Where to put CASH to make more CASH...
Uploaded: 2022-03-12T17:00:57+00:00
Duration: 41 s
Channel: Shanli Liu, CPA, CTP
Description: In this video, Shanli Liu explains that a business should be viewed as a cash‑flow‑producing asset. When owners have excess cash, the most effective use…

12 Mar 2022 · 1 min

Watch on YouTube

0:41

In this video, Shanli Liu explains that a business should be viewed as a cash‑flow‑producing asset. When owners have excess cash, the most effective use is to reinvest it back into the business to enlarge that cash‑flow asset. Reinvestment can take several forms: hiring talented personnel to boost enterprise value, adding or upgrading technology, expanding customer‑acquisition channels, and increasing media spend to broaden reach. Each of these actions creates a cycle where more cash is generated, which can then be reinvested again, effectively recycling cash to grow the business’s cash flow and overall value.

Chapters

Here's what it means when someone says you should invest into your business. Your business is a cash flow asset. It produces cash flow. What is the best thing to do with cash flow when you have it? When people have money, they want to put it in something that actually produces cash flow. And so that is why for most business owners, it makes sense to take that money and put it back into their business to then create a bigger cash flow asset that creates more cash flow that comes out of it. And the way that you do this, investing into the business, is by hiring talented people that can add to the enterprise value, by increasing enterprise value by maybe adding technology or expanding pathways in which you acquire customers, or by literally reinvesting in media. So expanding your reach by expanding how much media that your business has. And so as you do that, you literally are producing more cash flow. And so it's a recycling of your cash essentially.