Posted by: John Tozzi on July 25
Ken Morse, director of the MIT Entrepreneurship Center, dropped by for a chat today, and passed along an acronym every entrepreneur should learn: CFIMITYM. That is, “Cash Flow Is More Important Than Your Mother.”
"Cash Flow is More Important Than Your Mother" but many small business owners don't understand how to manage their cash flow effectively. Many times they see that they are making a profit, but they never have any money in their checking account. There are some basic rules to managing cash flow: speed up your receivables (the money others owe to you) and lengthen out your payables (unless you can take advantage of trade discounts.)
Even if the business owner has bad credit, there are alternate small business funding sources available. Equipment leasing, asset-based lending, factoring and invoice discounting have been around for a long time. For small business owners invoice discounting allows them to control their cost and use the service only as they need it.
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