There's something you can never afford to forget when you are running a business out of your home -- cash is king!
Whether it is a multi-billion dollar empire, such as Bill Gates' Microsoft, or the tiny mom-and-pop convenience store on the street corner, cash is the lifeblood of the business.
In today's uncertain economy with ever rising interest rates, many small businesses with limited financial training are having problems staying alive, let alone prospering. In fact, 63% of new businesses don't survive six years -- and most work-at-home people fail within 6 months!
The primary reason is bad cash management. To many self-employed people neglect their cash flow until it is too late to recover. Suddenly, presto! it 's back to your office job! We don't want that to happen.
So the big question is: will you be able to manage your cash flow effectively? If you are not sure, then you are on shaky ground.
Les Masonson, author of Cash, Cash, Cash: The Three Principles of BusinessSurvival and Success, says cash flow is all about, "getting the money from customers sooner, paying bills at the last possible moment, concentrating money to a single bank account, managing accounts payable, accounts receivable and inventory more effectively, and squeezing every penny out of your daily business."
Let's break down Masonson's tips one at a time.
HAVE A SUPER TIGHT ACCOUNTS
DISBURSE YOUR MONEY SLOWLY
NO EXTRA MONEY IN YOUR BANK ACCOUNT
GET AN ACCOUNT ANALYSIS STATEMENT
INVENTORY IS NOT