3 Best Tips to Improve Cash Flow Generation

A company can get by with sub-optimal strategy, average personnel, even inconsistent execution, but not a day without cash. This is even more important when a business is trying to scale as growth eats cash and internal generation is critical to avoid balance sheet leverage.

Costco is a prime example; they made a unique move in charging a membership fee for people to shop in their stores. These fees account for 70% of Costco’s pre-tax earnings ($3.3 billion of the $4.8 billion in fiscal 2019), providing them enough cash for new store expansions and an enviable negative net debt position.