Your cash flow statement can help in strategic decision-making in a number of ways.

When it comes to leaders, sometimes I wonder if we place too high a value on vision and not enough emphasis on the present-day reality. We are eternally fascinated with the Mark Zuckerburgs and Steve Jobs of the world, and rightfully so. These are incredibly smart, savvy and visionary people.

But if you get to the meat of the matter, even the brightest visionaries achieved lofty status by balancing vision with present-day reality. Or, to put it another way, they looked to the future and to their financials at the same time.

One of the key tools any owner must keep close at hand is a cash flow statement. It can help your strategic decision-making in a number of ways:

• It provides an accurate measurement of your current state, as opposed to where the bank thinks you are. A good cash flow statement provides an accurate picture of your actual cash position, as opposed to a bank’s balance sheet. This will help you with accurate forecasting.

• It helps you track the big opportunities. If you unleash the vision within you and roll out a new product or service, an accurate cash flow statement will help you correctly gauge ongoing progress. You can compare it with pre-determined goals to see if your grand vision is finding success.

• It keeps your investors calm. Nothing gets an investor, a.k.a. a lender, more jittery than having an unorganized investment. Knowing exactly where you sit in terms of cash flow, and how it fits into the overall plan, can help placate an investor when your cash flow appears to be waning.

• It helps you plan anew. Keeping track of cash flow is a great idea for today, but it’s even more helpful when it comes to planning for tomorrow. Previous expenditures will be critical as you plan for tomorrow; use all the available data you’ve got.

• It makes those rough seas easier to navigate. Typically, you’ll want to build a 3-5 year forecast of cash flow for your business. Obviously, those figures will be subject to change (what isn’t these days), but at least it will put you through a planning process. And when you do that, it’s easier to anticipate the big events looming on the horizon.

Any leader should aspire to be a visionary. You always want to look to the future. But business is like life – it’s a balancing game. Be sure to balance your big ideas with useful tools like a cash flow statement.

Rock LaManna helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path. He is President and CEO of the LaManna Alliance, and provides guidance on how to grow a printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan. Rock can be reached by email at

By Rock LaManna for Labels and Narrow Web Magazine

Published January 21, 2013