| "How little you know about the age you
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| | possibly save both businesses. These are
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| live in if you fancy that honey is
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| | real examples and are occurring every
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| sweeter than cash in hand". (Rome - Ovid
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| | day. Anyone in business or thinking of
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| Fasti Book 1 circa 350 B.C.).And so it is
| |
| | starting a business should put the
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| some 2350 years later. Too many small
| |
| | highest priority on cash. It starts with
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| business entrepreneurs seem to fancy the
| |
| | your personal budget to insure you, as
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| honey. They certainly don't understand
| |
| | the owner of the business, live within
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| the importance of cash in hand. Recently
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| | the salary or draw the business provides.
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| I completed two cash management
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| | Next you should have a cash flow budget
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| workshops, one at Houston Community
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| | for at least the next 12 months of your
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| College at Main and Elgin and the other
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| | business cycle, whether you are starting
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| in Wharton for the Wharton Economic
| |
| | a business or whether you have been in
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| Development Corp.The attendees were about
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| | business for years. This cash flow budget
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| 25% in business and 75% aspiring
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| | should accurately forecast each cash
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| entrepreneurs, about 60 in all. What
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| | expenditure you plan on making whether it
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| troubled me was that very few of the
| |
| | is an operational expenditure or spending
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| attendees had personal budgets no less
| |
| | for one time capital items. Coupled with
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| annual business budgets. There is not
| |
| | an accurate forecast of income (yes you
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| much hope when people consider cash
| |
| | can make reasonably accurate estimates of
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| management so cavalierly. In addition I
| |
| | income if you carefully define your
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| had cause to work with two failing
| |
| | premises and assumptions), you should not
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| business recently and in both cases the
| |
| | only know how much cash you have, but
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| cause of failure was poor or no cash
| |
| | when it will be spent and when it will be
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| management. With the failure rate for
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| | received.Too many small businesses choose
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| small business exceeding 50%, I would
| |
| | not to do this because they think it is
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| think that cash management would be a
| |
| | too much trouble or that it takes too
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| higher priority for those either in
| |
| | much time or that you can't forecast
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| business or thinking about it. In the
| |
| | income or expenses accurately, but none
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| case of the failing businesses, one was
| |
| | of that is true. Failure to accurately
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| in business less than a year. The
| |
| | forecast cash and lack of attention to
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| original business plan premised that they
| |
| | cash flow is a leading cause of business
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| would achieve 55% of revenue projection
| |
| | failure. You have heard it here before,
|
| the first month, 75% the second month,
| |
| | "When you're out of cash, you're out of
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| 95% the 4th month and 97% thereafter,
| |
| | business" and it has never been more true
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| truly impossible attainments. After 10
| |
| | than today. Listen to Ovid and know your
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| months they are at 70% of projections and
| |
| | cash in hand.June '02"Ed" McMahon's
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| are in dire financial straits. Why? They
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| | career includes the small business and
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| had negative cash flows from the
| |
| | corporate world. With degrees from
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| beginning (about $5000 to $ 6,000 per
| |
| | Villanova Univ. an MBA from the City
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| month) but until they defaulted on the
| |
| | University of New York and completed
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| bank loan they didn't seem to take any
| |
| | postgraduate work at the Stanford
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| corrective actions. Their start up cash
| |
| | University, he is the author of the book"
|
| did not take into consideration that the
| |
| | UnderstandingSmallBusiness(
|
| start up revenues might be less than
| |
| | Ed has extensive small business
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| premised and no cash was provided to
| |
| | experience. He has counseled several
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| cover this. Yet this appears to be a good
| |
| | hundred small business prospects in the
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| business that may die before it has a
| |
| | principles of small business.
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| chance to realize it's potential. Can
| |
| | He drafted the FTC disclosure statement
|
| this business be saved? Not without an
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| | for a major convenience store chain
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| infusion of cash.The other business is an
| |
| | currently operating.
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| independent car dealership that leases
| |
| | He has held senior posts as executive
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| new cars and buy and sells recent model
| |
| | vice president of a mid-size oil company,
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| hi-line used cars. This is a case where
| |
| | headed up the polymer division of a major
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| large sums of money are involved in
| |
| | chemical company and was taught
|
| buying, floor-planning and purchasing
| |
| | "UNDERSTANDING SMALL BUSINESS" workshops
|
| autos for lease and sale. The huge cash
| |
| | employed as an officer of a major
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| flow, for the most part, belongs to
| |
| | consulting company.Ed has taught Small
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| financing facilities, either banks or
| |
| | Business workshops at the business
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| investors, and must be managed with great
| |
| | college level, and for the past 11 years.
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| care. In both cases a rigid cash
| |
| |
|
| management system would have eliminated
| |
| | For 6 years his monthly column on small
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| the problem or provided early warning to
| |
| | business has been published in a regional
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| enable steps to be taken to correct and
| |
| | business journal.
|
