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.
FAST COLLECTION
DEPOSIT CHECKS FAST !
HAVE A SUPER TIGHT ACCOUNTS
RECEIVABLE POLICY
DISBURSE YOUR MONEY SLOWLY
NO EXTRA MONEY IN YOUR BANK
ACCOUNT
GET AN ACCOUNT ANALYSIS
STATEMENT
INVENTORY IS NOT CASH
LICENSING AGREEMENTS
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