One piece of advice that I would give an entrepreneur, no matter what stage their company is in, is that cash is king.I know that it is cliché, but it is nevertheless true.Cash flow is, in a lot of ways, the company's key to survival.Experience has taught me a lot of things about cash management, but there are a few specific pieces of advice and insight that maybe I can offer.
The first thing I would do would be to set a cash plan.Just like a budget.Set a plan.The second thing I would do would be to set goals.For instance, a cash goal might be t say by "X" date, we are going to have three months operating cash on hand at all times as an emergency fund.The third thing I would do would be to set some rules about the use of cash.For instance, you might say that any cash or purchase disbursement not in the plan has to get prior approval.
Periodically, take projected economic conditions into account.Have they changed since the last time you updated your cash plan?Are they different?What does that mean for my customers and my ability to collect payment?
The next thing that I would recommend is obviously to watch your receivables.If you sell on credit, you have to have continual flow of receivables.That does not mean you have to go out and offend your customers, but you could tactfully but firmly collect the money that is due.
The third thing would be to take control of what cash items in your plan and move them around such that you could smooth the flow of cash in your company.Other items you can move up when you have a lot of money or move back to times where you have more money.Take that into account and construct your cash plan accordingly.
Last thing, revisit the plan often.Make sure it is updated and make sure it is evergreen, so that it is always a meaningful document to everyone within your company.If an entrepreneur is putting together a cash plan or is having cash flow issues and would like some insight into doing this, I always encourage them to give me a call.We get a chance to see a lot of companies, and, at the end of the day, it is our business to maximize our entrepreneur's opportunity to get funded.

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