that then as a small business if growth consumes cash, it must generate cash. Cashless growth is like malignant tumours and should be treated as such.

5. Set expectations. It is difficult when you are out of cash. It's even more difficult when you are out, down on the floor and being beaten to death by people you owe money. Set realistic expectations at the time you place orders and negotiate vendor credit. Prefer vendors who will give you credit compared to those who will only deal on cash. And then make sure that you me

Here is my list on staying out of trouble on the cash flow front

1. Don't spend money you don't have. Till a deal closes and the cheque clears in the bank - it is not money in the bank. So keep an eye out on that number and limit your spending urges to what you have, not what is in the pipeline.

2. An uncollected invoice does not count as cash. Customer payments sometimes take 3 - 4 times the time you originally planned for collection. If a customer hasn't paid within the 7 - 10 days originally planned then there is no right estimate of when or if he will pay. In statistics we say that the distribution has no memory and the wait time has no correlation with the amount of time that has already elapsed. He may pay tomorrow or he may not pay at all.

3. Stay away from credit cards. You can't build a company on credit card debt. Though its tempting and easy to believe that you can. Much more preferable are stable longer term arrangements like leases, over draft facilities, vendor and employee credit or short term loans (that you can and do pay back) from immediate family. Credit card debit grows on you, is difficult to get rid of, turns into a runaway wreck if you are not careful and for most of us is very expensive. Its like getting gas for you car at 9.00 dollars a gallon because it is right next doors and available versus the 3 or 4 it may cost further down the road if you look for it. Similar to gas it is not the one time purchase at 9 dollars a gallon that kills you. Keep on buying 9 dollar gas for a year and you would probably stop driving and auction your car on ebay. Keep funding your business with credit card debt and you will meet a less cheerful fate.

4. Grow at a pace that you can afford. New business require additional employees, workspace, facilities, and overhead. There is a delicate balance between growth that grows and growth that kills. There are times when a customer will fund that growth for you and there are times when you would need to fork out cash. But the bottom line is the same - without cash or cash reserves, no profitable growth is possible. If you extend that then as a small business if growth consumes cash, it must generate cash. Cashless growth is like malignant tumours and should be treated as such.

5. Set expectations. It is difficult when you are out of cash. It's even more difficult when you are out, down on the floor and being beaten to death by people you owe money. Set realistic expectations at the time you place orders and negotiate vendor credit. Prefer vendors who will give you credit compared to those who will only deal on cash. And then make sure that you mee

ed then there is no right estimate of when or if he will pay. In statistics we say that the distribution has no memory and the wait time has no correlation with the amount of time that has already elapsed. He may pay tomorrow or he may not pay at all.

3. Stay away from credit cards. You can't build a company on credit card debt. Though its tempting and easy to believe that you can. Much more preferable are stable longer term arrangements like leases, over draft facilities, vendor and employee credit or short term loans (that you can and do pay back) from immediate family. Credit card debit grows on you, is difficult to get rid of, turns into a runaway wreck if you are not careful and for most of us is very expensive. Its like getting gas for you car at 9.00 dollars a gallon because it is right next doors and available versus the 3 or 4 it may cost further down the road if you look for it. Similar to gas it is not the one time purchase at 9 dollars a gallon that kills you. Keep on buying 9 dollar gas for a year and you would probably stop driving and auction your car on ebay. Keep funding your business with credit card debt and you will meet a less cheerful fate.

4. Grow at a pace that you can afford. New business require additional employees, workspace, facilities, and overhead. There is a delicate balance between growth that grows and growth that kills. There are times when a customer will fund that growth for you and there are times when you would need to fork out cash. But the bottom line is the same - without cash or cash reserves, no profitable growth is possible. If you extend that then as a small business if growth consumes cash, it must generate cash. Cashless growth is like malignant tumours and should be treated as such.

5. Set expectations. It is difficult when you are out of cash. It's even more difficult when you are out, down on the floor and being beaten to death by people you owe money. Set realistic expectations at the time you place orders and negotiate vendor credit. Prefer vendors who will give you credit compared to those who will only deal on cash. And then make sure that you me

t you can and do pay back) from immediate family. Credit card debit grows on you, is difficult to get rid of, turns into a runaway wreck if you are not careful and for most of us is very expensive. Its like getting gas for you car at 9.00 dollars a gallon because it is right next doors and available versus the 3 or 4 it may cost further down the road if you look for it. Similar to gas it is not the one time purchase at 9 dollars a gallon that kills you. Keep on buying 9 dollar gas for a year and you would probably stop driving and auction your car on ebay. Keep funding your business with credit card debt and you will meet a less cheerful fate.

4. Grow at a pace that you can afford. New business require additional employees, workspace, facilities, and overhead. There is a delicate balance between growth that grows and growth that kills. There are times when a customer will fund that growth for you and there are times when you would need to fork out cash. But the bottom line is the same - without cash or cash reserves, no profitable growth is possible. If you extend that then as a small business if growth consumes cash, it must generate cash. Cashless growth is like malignant tumours and should be treated as such.

5. Set expectations. It is difficult when you are out of cash. It's even more difficult when you are out, down on the floor and being beaten to death by people you owe money. Set realistic expectations at the time you place orders and negotiate vendor credit. Prefer vendors who will give you credit compared to those who will only deal on cash. And then make sure that you me

ar on ebay. Keep funding your business with credit card debt and you will meet a less cheerful fate.

4. Grow at a pace that you can afford. New business require additional employees, workspace, facilities, and overhead. There is a delicate balance between growth that grows and growth that kills. There are times when a customer will fund that growth for you and there are times when you would need to fork out cash. But the bottom line is the same - without cash or cash reserves, no profitable growth is possible. If you extend that then as a small business if growth consumes cash, it must generate cash. Cashless growth is like malignant tumours and should be treated as such.

5. Set expectations. It is difficult when you are out of cash. It's even more difficult when you are out, down on the floor and being beaten to death by people you owe money. Set realistic expectations at the time you place orders and negotiate vendor credit. Prefer vendors who will give you credit compared to those who will only deal on cash. And then make sure that you me

that then as a small business if growth consumes cash, it must generate cash. Cashless growth is like malignant tumours and should be treated as such.

5. Set expectations. It is difficult when you are out of cash. It's even more difficult when you are out, down on the floor and being beaten to death by people you owe money. Set realistic expectations at the time you place orders and negotiate vendor credit. Prefer vendors who will give you credit compared to those who will only deal on cash. And then make sure that you meet those expectations. Unless and until you have a history of being a consistent late payers, most vendors and suppliers will make one time exceptions for you. If you have decent payment history, good negotiations and presentations skills you will find that vendor credit will be cheaper than credit cards, overdraft lines and leases.

6. Pay yourself. Ultimately the success and failure of your business depends on your ability to carry on. In good and bad times make sure you pay yourself enough to build reserves that can see you through when times are bad.