The Flow of Money

As businesses produce products and provide services to other businesses and to individuals, money flows from business to business, individual to individual, and between businesses and individuals. Money also flows within and between towns, cities, counties, regions, states, and countries. As a result, some individuals, businesses, and communities generate a positive flow of money and prosper, while others do not. There are winners and losers!

When I look around my community, I see people going to work, manufacturers shipping goods, businesses providing services, local merchants stocking shelves, tourists enjoying lunch, retirees playing golf, newcomers building homes, entrepreneurs starting businesses, city employees setting up for a parade, etc., all of which set the stage and create the flow of money that determines a community’s prosperity.

The idea of developing money flow strategies first came to me early in my career. It was my first week on the job as the county’s economic developer and I was going around introducing myself to the plant managers. During one of the meetings, I asked a recently transferred plant manager if he was happy with the housing choices in the county. He hesitated for a moment and said that housing was something I needed to look into because he and almost all of his management team lived in the two neighboring counties where housing was plentiful and the school systems rated higher. After a few more questions and further discussion, I realized that many of the production workers also lived outside of the county. Money flowed into the county in the form of wages and flowed right back out when employees spent their paychecks in neighboring counties. This attitude that everything was better outside the county also carried over into the company’s purchase of materials, supplies and services, which deprived local businesses of potential income and the community of the prosperity it was looking to achieve.