BSG Online Help – Cash Flow

The lifeblood of any company is the cash flow that exists between costs and profits. In the Business Strategy Game, cash flow is something that must be carefully watched and prepared for. Being too short on cash runs the risk of going into overdraft and paying a premium interest charge. Too much cash flow is a waste of a valuable resource within the game that should either be paying off debts, building capacity, issuing dividends, etc.

In the many years that I’ve played BSG, the recurring number that seems to be a good ending cash balance is about $20,000. This provides for a hefty cushion in case the worse comes to pass. For companies that are extremely large and vast in size, I may increase the ending cash balance to be more around 35,000. There is one element in the whole game that is incredibly risky and can make it appear that your cash balance is very high, but in reality it is not 100% reliable. I am talking about the private label market.

It is possible to be defeated in a private label market incurring substantial costs and thus lowering your net profit and subsequently your cash account. The only way to reliably know where your cash balance will be in the worst case scenario is unclick all the PL markets to see where the company would be without PL revenues. This ending balance should be about $15,000- $25,000 depending on the size of the company.

Acknowledging the worst kind of situation that could befall a BSG company allows a shrewd manager to brace themselves for an unexpected surprise. Following this rule will prevent your company from going into overdraft and all the avoidable costs associated with it.

For more help email admin@bsgtips.com

The Grand Champion of The Business Strategy Game and The Glo-Bus Simulation Game. For more Business Strategy Game Help that teaches how to Win Business Strategy Game and The Glo-Bus Simulation Game go to www.bsgtips.com/glo-bus