Firstly you need to totally understand Cash Flow………… Positive cash flow means you can successfully run and grow your business, whilst negative cash flow is the opposite of that !

Knowing everything that impacts the inflow of cash and everything that impacts the outflow 
is a huge advantage. Of course some things are obvious like sales, impact inflow and expenses effect outflow.

What about Inventory ? Have you thought about how the amount, the flow and the management of your inventory impacts your cash flow ? Inventory is the single largest ongoing investment in your retail business and as such, the way you manage this area will have a critical impact on your cash flow and profit. 

The sales from this inventory, is also the only source of income. Hence the importance of ensuring it is managed in a way that will maximise opportunities and minimise risk.
Basically like any other investment you want to establish a process that will put that investment to work, to achieve the best return (ROI).

After all, when you are buying and selling product, turning it back into cash is the only way to make a profit and enable you to fund expenses and future purchases. The more effective this process is, the more profitable and cash flow positive your business will be.

The ability to generate maximum sales, on the smallest inventory investment as possible, whilst maintaining sufficient stock to maximise the sales potential, is the best way to achieve the highest inventory ROI and therefore the highest Gross Profit and the best Cash Flow results for your business.