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Cash flow and financial literacy
Richard Landzaat, Founder of Summa Financial Services, says these are the two biggest problems impacting small businesses. Why cash flow and financial literacy? Based on decades of experience working with entrepreneurs, Richard has found that managing cash flow and knowing the primary building blocks of financial health give you the clarity to make better business decisions.
Why cash flow is a major obstacle for small businesses
Cash flow is the lifeblood of any small business. If you don’t have it, then you’re out of business.
Richard Landzaat, Founder, Summa Financial Services
Cash flow, the amount of money your business brings in compared to what it costs to run the business itself, determines whether your business has the financial strength it needs to meet your goals and weather ups and downs.
Why cash flow matters in 2025
The uncertainty of on-and-off-again tariffs has raised the costs of almost everything, putting pressure on customers and vendors, and stressing the entire small business ecosystem. Customers are buying less, invoices are late or unpaid, and the lending market has tightened.
In essence, there’s less cash coming in and fewer ways to respond. Here’s how Richard put it.
Fact: According to Statistics Canada, nearly half (49.3%) of businesses expect inflation to be an obstacle over the next three months.
Why cash flow always matters
In good times and bad, knowing how and when money flows in and out of your business gives you clarity and control. Knowledge is one of the best tools you can have.
Why financial literacy is a significant small business hurdle
Most small business owners know their business. What they don’t know is what makes this business run.
Richard Landzaat, Founder, Summa Financial Services
No one starts a business so they can focus on finances. The average business owner, such as a mom-and-pop convenience store, knows they run a convenience store. They stock the shelves and sell products to customers. But there’s more to it than that.
Why financial literacy matters in 2025
Financial literacy goes hand in hand with understanding cash flow. Consider cash flow the hero, with factors like inventory, invoices and payroll as supporting characters. The more you know about these characters, the better you’re able to control the script and respond to any plot twists.
Life is what happens when you're busy making other plans.
John Lennon, Lead Singer, The Beatles
Every day, you do your best to make good decisions that benefit your business. The more information you have and the better you understand this information, the better your decisions. Richard gave an example that ties financial literacy and cash flow together.
Using the mom-and-pop convenience store as an example. All convenience stores carry milk. That’s what makes them convenient. So, the mom and pop store has to buy milk from its milk supplier, which the business owners then sell to their customers.
In this scenario alone, there’s inventory, pricing, cash flow and margins. How much milk should they buy? When they purchase the milk, that’s a cash outflow to the supplier. The money flows back in as they sell the milk to customers. But, how quickly do they recoup the costs? How much profit are they earning? And, is milk truly a “cash cow” for this business?
How can small businesses find better answers?
First of all, take a deep breath and know that you’re not alone. Chances are, you’re not the only one going through this, and there are real humans and simple tools to help.
Experts, like small business accountants and bookkeepers, are there to guide you and help you understand and manage cash flow and your overall financial health. AI-powered advisors like Roy help answer your questions and a complement of soon-to-be-released tools makes it easier to run your business and build your knowledge.
Find both at Huumans.com. We’re just getting started and it’s starting to get very exciting.
