We have all heard by now that you should keep anyhere from 2 to 3 months worth of business expenses in the bank for when times are lean, but exactly why is that? Are not having profits simply enough? Well to put it politely, NO!

It’s not enough to have profits when those accounts have never paid you. It’s not enough to send out invoices and yet, not have deposits to show for it. A small business (or any business for that matter) can survive without income for a little while, but it will not survive without cash at all for any length of time. Cash is the absolute lifeblood of all businesses.

Cash can take on many various forms such as extra money in an account, stretching out accounts payable, established lines of credit, funding from private investors, and having assets that are easily liquidated into cash. By having cash or quick access to it, your company can avoid going into debt and avoid paying unnecessary interest on business debt.

When you have available cash, you can take advantage of sales on much needed equipment. Paying with cash in full normally accompanies discounts which will also enable your company to save additional money. To put is simply, cash is a small businesses lifeline. Without it, there is no business.

Some may mistakingly think that the quality of their product or service is the most important aspect of their business, but they are dead wrong. There are a lot of average products or services out there in the market place that make a whole lot of money due to effective marketing and sales. It is selling that is more important. Either the business owner does it or they must hire salespeople that can do it for them.

For the small business, sales is a time consuming process that involves reaching out to prospective customers, meeting with them, explaining your product or services’ benefits, answering follow up questions, and asking for the order. You cannot afford to become complacent when it comes to your business cash flow. Without it, the doors close permanently. It simply is not enough to sit at ease in your office or store front waiting for customers to magically appear.  You must pursue them relentlessly with taste and tactfulness.

The customer already expects a quality service or product from you so you are wasting your time if you are putting quality ahead of sales. Just because you build a better mouse trap does not mean that people will buy it. How can they buy something that they have not heard of? It is not enough to have a website, some brochures, nice business cards, and a fancy office. You must actively promote and sell your business nonstop.  This means making cold calls, calling old customers, placing targeted ads, creating radio spots, running adwords campaigns, and the list goes on. As a small business owner, you must continually, without deviation, pursue the potential customer  through referrals, introductions and appointments. Always keep in mind that quality is not job #1. It is Sales that are the #1 job in the company.