For all the hard work it takes to start a business and make it profitable, it is remarkable how quickly a few bad decisions can cripple a business and drive it into the ground.
Barry Moltz, a frequent contributor to OPENForum, offers what he calls the five most common mistakes “that will quickly put you out of business” (with suggestions on how to avoid them).
“Every company goes out of business for exactly the same reason,” Moltz notes. “They run out of cash.”
Building a business is not just about growing sales or profit. It is about closely tracking your company's financials, and eventually increasing, the cash your company can retain.
Make sure to read your cash flow statement every month “... and figure out the sources and uses of cash in your business.”
At the very least, Moltz says, look at a reconciled bank statement to determine whether your business has more or less cash at the end of the month. (more…)
