In startups, cash is king. It’s the key financial metric to watch.

Growth may be going straight up, customer traction may be better than ever, but if cash runs out then it all comes crashing down.

Cash management is a daily exercise.  

The first step is to understand every inflow and outflow of cash.  

Set up tools to alert for cash disbursements over a certain amount.

Watch incoming cash from customers and follow-up when it goes off-track.

Set up a daily cash-management plan. 

Identify the biggest cash hits during the month. This is usually payroll.

Investigate how to move around other expenses to match your incoming revenue.

A recurring revenue model helps as it brings in cash on a regular basis throughout the year in most companies and helps with the cash flow.

With some revenue, you can go to the bank and set up a line of credit. This lets you draw down some bank debt and pay it off in the following weeks.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.