The idea of turning your business into a free cash flow positive organization—a company whose cash inflows exceed the outflows required to run it—isn’t just some accounting exercise to mark off the CFO’s 2021 to-do list. On the contrary, once you follow the three-step plan for achieving a free cash flow positive state as outlined for the Tesorio blog by Stephanie Layne, Director of Treasury at Unity Technologies, it opens up a world of possibilities. Just think about the essential things you need in order to grow your business. They all require excess cash on hand, which a free cash flow positive state provides.

1. Hire more employees.

If you’re operating with a skeleton crew due to unforgiving budgets, growth is difficult if not impossible. But when you’re able to bring on more staff, you can change your business’ trajectory, especially when you can beef up currently understaffed or revenue-producing areas, including employees in:

• Product and service development to expand and enhance what you offer to customers
• Marketing and advertising to help spread the word about your company further and wider
• Sales to convince prospects to buy and current customers to buy more
• Customer fulfillment and experience to ensure customer satisfaction and loyalty
• Accounts receivable to more quickly process and collect invoices

2. Recruit higher caliber talent.

Not only does a free cash flow positive state allow you to add staff, it also means you can attract and retain employees who are more experienced, credentialed, or specialized in their particular fields, in order to give you an edge over your competition. This could include:

• Executives for the C-Suite
• Tech systems professionals
• Product engineers or software developers
• Information security or cybersecurity experts
• Regulatory compliance professionals

3. Invest in hard and soft assets.

It takes more than people to grow and expand your business capacity. More cash in the bank means the ability to reinvest back into the business for such things as:

• Additional machinery to process more goods
• Newer, more sophisticated equipment that can process goods faster
• Another office or manufacturing facility to reach new markets, create more capacity, and/or ensure business continuity
• Software that can streamline and automate key business functions, including connected finance tools

4. Expand outreach efforts.

With more cash, you can also take your marketing, advertising, and sales efforts to the next level by:

• Developing more marketing collateral, such as thought-leadership articles and white papers
• Attending more industry conferences
• Buying more advertising spots and/or advertising in more advantageous outlets
• Extending sales territories beyond their current footprints

5. Pay off debt.

Is a commercial line of credit coming due? Or would you like to eliminate some of your company’s debt payments? Either way, you’re better positioned to manage your liabilities when your company is free cash flow positive.

Tesorio Can Help You Become Free Cash Flow Positive

Are you ready to flip your company script from free cash flow negative to positive? Tesorio’s Cash Flow Direct helps you more easily and accurately track and forecast your cash position. Request your demo today. To learn more about adopting a direct cash flow forecast and creating a free cash flow positive state, listen to Tesorio’s recent webinar, Solving the Cash Flow Disconnect.