6How to manage your business cash flowFrom chaos to control
Most people will use their own savings to start a business and, in my experience, they often underestimate how much cash is required to get a business off the ground. If you are creating your own products, as opposed to drop shipping (products you ship direct from a supplier, and you don't hold any stock for), this will likely require a lot of capital or personal cash injections to manufacture your product (and pay for it up front).
It's so important to have a strong understanding of financial management before diving head first into building your product-based business. If you don't get the numbers and your cash flow right, it can end up being a very costly lesson. Before you do anything in your new business, run your numbers, and work out how much cash you will likely need. If you don't know how to do this, you should see a financial expert who can help you work through your initial cash flow projections and create a feasibility study for you. Getting these things right from the start will save you money in the long run.
As you will discover in this chapter, if you don't have an operating budget or a financial plan for how you will grow your business, you face the real possibility of losing your money or, worse still, your business.
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