the start.... the 1st friend

So you have now started.... In case you havent please go back and read the earlier 3 posts as in case you have not started what i am saying now will not be relevant for you... Oh you havent started but you still want to read further , ok its a free world but dont complaint in case you find this boring....

Once you start the first 90 days will be one of turmoil. This would be a mix of frustration and exhileration but i promise you that these days will be ones that you will never forget. Remember your closest friend in the early days (and people will say in days to come also) would be... cash. yes you read this right, cash.

Surprised ! Cash is one thing which lubricates the wheels of business and also in most cases is singularly responsible for your peace of mind during this phase. In case you have a rich benefactor then life is made for you as this friend is not something you need to work to acquire but it comes with the territory! If you ask me the single biggest leason that i learnt (at my own expense) in the early days of entrepreneurship was the management of cash. It is not that one has to get obessessed with it to the exclusion of everything else that one thinks about but you need to treat it with the same respect as you would treat a friend.

Cash in early days is used in 2 things (as it is for most periods of your business). One is for making investments ie buying stuff which would be used for longer periods of time and the price of which you would recover over a time frame (computers/software/office space/website etc) and the other is expenses which are one time costs (salary/phone bills/travel etc) .These expenses could also sometime be one time and non recurring in nature (in case you are taking an office then you would need to pay a deposit).

Remember investments always get a preference over expenses and you can be slightly more liberal with them and similarly slightly less concerned about costs which are one time and non recurring in nature. It is the regular expenses (also called working capital) which you need to be careful with and make sure that you have that in check during the period of trial (see earlier post to understand meaning of this term).

i have some good news , apart from cash (which is cold) you also have another friend during your early start up days.... who is that ???? more in the next post.