In today's episode, we will be discussing the three best tips to forecasting and growing your small business through robust financial management. We will also touch on the bankruptcy of Silicon Valley Bank, which collapsed due to poor forecasting and cash flow management.
Silicon Valley Bank was one of the top 20 banks in the US and had secured investment or bonds of treasuries from the US, paying them a low-interest rate. With rising interest rates, the bank's deposit holders asked for a higher return, but the bank was earning less than it was paying, resulting in a mismanagement of cash flow. Here are the three tips to ensure that you do not suffer the same fate as Silicon Valley Bank:
In conclusion, forecasting and cash flow management are crucial to the success of any small business. Accurate data, multiple scenarios, and easy-to-maintain methods are essential to ensure that your business grows and prospers. Silicon Valley Bank's bankruptcy is a clear example of the importance of proper forecasting and cash flow management. Take heed of these tips to ensure that you do not suffer the same fate.