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The 12 Steps to Entrepreneurial Success: Manage Your Money, Your Most Important Asset

By Dr Paul E Adams |

"Remember, early to bed, early to rise, 'til you make enough money to do otherwise." - Joe L. Whitley

Do you know anyone anxious to become an entrepreneur who lives paycheck to paycheck or maintains a lifestyle with- easy to get- home equity loans? I do, and I doubt that anyone who has difficulty managing his or her personal finances can manage a business. Above all other "entrepreneurial traits," you need a solid understanding of money management- plus good money habits. to make a go of it. Without such discipline and knowledge, it will be tough to succeed.

Money- for some the most difficult to come by- is your most important asset. If you run out, unpaid bills can cause problems; but not paying your employees, your telephone bill, your electric bill, your taxes or your landlord can put you out of business. Your employees will quit, as they don't extend credit. Try to operate without electricity- if your office is dark, and your computer down, you are, in effect, closed.

If you do lack an understanding of money management, you will soon discover that your ability to survive in business requires more than simple record- keeping. You will need the discipline to work efficiently with limited funds and manage your cash flow. Remember these three points: You will fail if you run out of money. You may fail if you do not know you are losing money. You can fail if you have too much money.

If money management is not your top talent, don't toss your business plans aside, learn to master it. Knowledge, curbing your spending impulses, patience, and the fear of failing may do it for you.

Here are some general rules of successful cash management. May I suggest you save this column-post it on your bulletin board or refrigerator as a reminder of what you must do to make it

How to Keep Your Cash


  1. If you sell on credit, check customer references.
  2. Don't be bashful about collecting money. If you can't ask for your money, you have a problem.
  3. Forecast your cash needs and collections. If you do not know how- ask your accountant to show you.
  4. Don't rely on collection agencies to collect your money. They will keep your profits.
  5. Don't think you will win if you sue. You probably will settle for half and give that to your lawyer.
  6. Stretch your payments. Demand your supplier's extent you the longest credit terms possible.
  7. Establish a savings account for taxes- keep the money you owe the IRS out of your checking account.
  8. Pay yourself first- it is your security blanket- establish a saving account of 5% of every dollar you take in- in twenty months you will have a months' income in the bank.


Are You Earning a Profit?
If not your cash will not last. Believe me, it is the only reason to be in business.


  1. Staying in business is simple: just earn a profit!
  2. The balance sheet is a photo of your financial condition.
  3. Assets that don't turnover tie-up your cash.
  4. Paper losses reduce taxes, but cash losses can close your doors.
  5. Pay attention to changes in your equity.
  6. Put together a budget.
  7. Keep reviewing your budget.
  8. Keep your overhead as low as possible.
  9. Your gross profit must exceed your expenses.


Be Careful if You Invested or Borrowed too Much Money
It may surprise you, but you can fail if you have too much money. A surplus of cash may give you a sense of false security, dismissing any urgent need to make your business profitable. It may allow you to overspend and expand too soon.

Too much money can quickly become too much inventory or you may be tempted to be generous with credit terms to your customers. Surplus cash can lull you into complacency-you will not:


  1. Watch your spending.
  2. Avoid premature expansion.
  3. Have a sense of urgency.
  4. Rush to get profitable and stop the losses.
  5. Avoid committees and time wasting meetings.
  6. Know if you are profitable or not
  7. Avoid excess inventory at all costs.




Step 1. Understanding Yourself
Step 2. Getting Things Done
Step 3. Apply Yourself- Don't Be Lazy
Step 4. The Importance of Getting Organized
Step 5. Keep Your Emotions in Check
Step 6. Learn to Say No
Step 7. Practice the "Golden Rule" in all of Your Affairs.
Step 8. Avoid the Perils of Expansion
Step 9. If You Want Success Ask for it. And Keep Asking.
Step 10. Manage Your Money- Your Most Important Asset.
Step 11. Recognize The Risk
Step 12. A Sure Way to Fail: Quit too Soon!
The Twelve Affirmations to Success

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