Cash Management

(preview from the book)

Cash Management used to be known as budgeting.  As individuals, we use budgeting to warn us in advance if we don’t have enough money to pay our bills as they come due.  If there isn’t enough money, not only can we not afford to buy that progressive-scan DVD player and the surround-sound system we’ve been looking at, we may not be able to afford a trip to the grocery store.  The same concepts apply to our business.
Of course at home, we all know that we don’t need real money if we have a credit card.  (This traditional delusion has caused many personal bankruptcies and destroyed many marriages.)  In business, the misuse of debt will cause a business to fail just as quickly as it will destroy a marriage.  Many people drive their businesses into the ground because they try to finance operating costs with expensive credit, the way foolish people run their lives.  That’s a harsh statement, but if you are offended perhaps it’s time to evaluate your cash management habits.

Here are some hard questions: If we don’t manage our cash…