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Go with the flow: five steps to ridding your business of cash-flow woes.

Article Excerpt
We've all heard the expression that money makes the world go 'round, but as a small business owner, it's important to remember that the money that keeps your world spinning is cash on hand, not unpaid receivables. If this seems like a nuance, just ask any experienced small business owner about cash-flow and you're sure to hear tales of close calls, painfully tight months and even business failures.

Many small business owners--particularly those opening a business for the first time--end to gauge the health and success of their business on things such as profit margins, sales growth or strong customer loyalty. While these are critical metrics, the reality for any business is that balanced cash-flow is an equally important indicator of well-being because cash pays the monthly bills, covers the payroll, and can be invested back into the company to support expansion.

Cash-flow management is often a cause for entrepreneurs' insomnia, with one in four small business owners citing cash-flow issues as something that "keeps them up at night," according to the Fall 2007 Small Business Monitor, a semi-annual survey of business owners conducted by American Express OPEN. In fact, nearly half of entrepreneurs report experiencing cash-flow issues, with those affected often accessing their personal or private funds, using a line of credit, putting off purchases or using a charge card or short term loan in order to address their concerns.

To avoid the perils of uneven cash-flow, small business owners simply need to keep these...

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