Cash Flow is King - Don t Get Behind in Your Collections
If you truly want to succeed in business you must always remember that cash flow is king. One thing that I always recommend to startup companies and small entrepreneurs is to not get behind in their collections. Without the cash flow coming and you cannot expand your business and you cannot plan for emergencies because your entire business will be in a constant state of emergency without the necessary cash flow.
Currently the United States of America is in turbulent financial times and it is getting very tough for businesses small, medium and even large corporations to get the funding they need to grow their businesses or to get over the hump during their slow seasonal periods. If a small manufacturing company sells to a large retailing giant and that company does not pay them on time or strings out the receivables, the smaller company can easily go out of business.
One thing large corporations do during the lean times or at the bottom of the business cycle is to outsource much of their business and close their unprofitable business units. Then what they do is they have the smaller businesses servicing them as vendors to supply them with their needs. The corporation then strings out the payments for services and products sometimes well over 120 days. Sometimes if things get to tough for the little business the large corporation offers to buy them out for a steal. Yep, welcome to the world of business.
Often small businesses are quite excited to get a large accounts from a big corporation because they know that that amount of money coming in will help them survive and keep them safe with lots of cash flow. This is not always the case because often they are buying the account, rather than just getting new business. In fact, many small businesses become banks to larger corporations during the lean times.
This allows large corporations to keep their cash flow and remain supported on the backs of many smaller companies. So remember cash flow is king and if you are a small business or a medium size business do not get behind in your collections or you might just be one of the many businesses that goes out of business during a recession.
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