Making a sale is very important. But collecting the money for the sale is even more important. It does not do any good to sell a product if you don't collect your money.
The single biggest reason the small business failure rates are so incredibly high today is this one simple fact: Most business owners don't really know what's going on with their most precious asset - their CASH.
You would be shocked and amazed at the number of businesses that fail because the owner did not see a cash flow problem in time to do something about it.
Trying to run a successful business without cash flow projections is like driving along on the freeway in a driving rainstorm without turning on your windshield wipers.
If you needed to know what your cash balance was right now, would you look to your accounting system for the answer or would you call (or go online) with your bank?
I conducted a survey recently to determine the degree to which small business owners have their cash flow under control.
The survey results showed that only 20% of business owners feel like they have the cash flow of their business under control. That means 8 out of every 10 business owners are trying to manage their business without having the financial side of their business under control.
The statistics on small business failure are alarming.
Michael Gerber, author of "The E-Myth: Why Most Small Businesses Don't Work and What To Do About It", says that 40% of businesses fail in their first year. 80% fail within their first five years.
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