Dragon on Cash Flow
James Caan gives his advice to the Apax Partners-Mosaic Enterprise Challenge teams to prepare them for the heats, which rage on. This time, it's all about money so pay attention...
Cash is the single-most important element of any business, especially when you're starting up. If you don't manage your cash flow, your business will struggle to survive.
There is a flow of cash into and out of your business which requires a high level of management.
Inevitably, your suppliers will chase you to pay them as quickly as possible and your customers will delay paying you for as long as they can. This can create nasty problems for your cash flow if not properly maintained.
If your customers haven't given you the money from your sales, you can't pay your suppliers, and soon enough you will be out of business even though you may be making sales.
Being able to manage your cash effectively is a skill that many entrepreneurs lack and is the biggest cause of failure in Start-Ups. Therefore it is essential to stay on top of your cash flow in order to be a successful entrepreneur.