car dealership that leases new cars and buy and sells recent model hi-l

"How little you know about the age you live in if you fancy that honey is sweeter than cash in hand". (Rome - Ovid Fasti Book 1 circa 350 B.C.).


And so it is some 2350 years later. Too many small business entrepreneurs seem to fancy the honey. They certainly don't understand the importance of cash in hand. Recently I completed two cash management workshops Cheap Reds Shirts , one at Houston Community College at Main and Elgin and the other in Wharton for the Wharton Economic Development Corp.


The attendees were about 25% in business and 75% aspiring entrepreneurs, about 60 in all. What troubled me was that very few of the attendees had personal budgets no less annual business budgets. There is not much hope when people consider cash management so cavalierly. In addition I had cause to work with two failing business recently and in both cases the cause of failure was poor or no cash management. With the failure rate for small business exceeding 50%, I would think that cash management would be a higher priority for those either in business or thinking about it. In the case of the failing businesses Cheap Reds Jerseys , one was in business less than a year. The original business plan premised that they would achieve 55% of revenue projection the first month, 75% the second month, 95% the 4th month and 97% thereafter Wholesale Tom Seaver Jersey , truly impossible attainments. After 10 months they are at 70% of projections and are in dire financial straits. Why? They had negative cash flows from the beginning (about $5000 to $ 6,000 per month) but until they defaulted on the bank loan they didn't seem to take any corrective actions. Their start up cash did not take into consideration that the start up revenues might be less than premised and no cash was provided to cover this. Yet this appears to be a good business that may die before it has a chance to realize it's potential. Can this business be saved? Not without an infusion of cash.


The other business is an independent car dealership that leases new cars and buy and sells recent model hi-line used cars. This is a case where large sums of money are involved in buying, floor-planning and purchasing autos for lease and sale. The huge cash flow Wholesale Ken Griffey Jersey , for the most part, belongs to financing facilities, either banks or investors Wholesale Tony Perez Jersey , and must be managed with great care. In both cases a rigid cash management system would have eliminated the problem or provided early warning to enable steps to be taken to correct and possibly save both businesses. These are real examples and are occurring every day. Anyone in business or thinking of starting a business should put the highest priority on cash. It starts with your personal budget to insure you, as the owner of the business, live within the salary or draw the business provides. Next you should have a cash flow budget for at least the next 12 months of your business cycle Wholesale Reggie Sanders Jersey , whether you are starting a business or whether you have been in business for years. This cash flow budget should accurately forecast each cash expenditure you plan on making whether it is an operational expenditure or spending for one time capital items. Coupled with an accurate forecast of income (yes you can make reasonably accurate estimates of income if you carefully define your premises and assumptions), you should not only know how much cash you have, but when it will be spent and when it will be received.