Measure your company’s way to success
Daily Finance - 05/09/2014
Successfully starting and running a business is about many things: hard work, determination, innovation, human relationships and management. And numbers.
You can’t manage what you can’t see. When it comes to business basics, processes and results, numbers count, literally and figuratively. However, you can waste a lot of time obsessing over things that don’t count. Here is one approach to learning what is most important to your business so you can steer your company over the inevitable bumps and come out on top.
Put Cash at the Top of the List
People going into business focus on revenue. While that is obviously important, it can be a misdirection. One of the big reasons ventures fail is they are undercapitalized. To avoid running out of money while you’re trying to get the company up to speed, watch cash carefully.
“I think experienced entrepreneurs tend to protect cash balances better than early stage or first-time and second-time entrepreneurs, who are surprised about the burn rate,” or the speed at which the new company spends cash for ordinary operating expenses, said Dan Gregory, director of Northeastern University’s Digital Media I-cubator. “When you don’t have it, $50,000 seems like a lot of money, but $50,000 when you do have it is gone before you know it.”