The Language of Business

Whenever I talk to entrepreneurs, serve as their consultant, or teach them in my classes I always have one consistent message. They have to become financially literate to improve their chances of success in their ventures. In fact, I believe this so strongly that I wrote a book on the topic! Bradley Feld has written a summary of some of what he believes are the key aspects of sound financial management for entrepreneurs. Most of what he writes is right on target.


?Cash is king.? This is one cliché ´hat every entrepreneur cannot be reminded enough! Choose your favorite metaphor for cash flow: life blood, fuel, engine, or wind in your sails (no pun intended). Without cash, you are out of business.
Feld stresses the importance of getting then numbers you need to manage your particular business and of building a basic operating budget. These things should be in place from day one. Check and double check all of the numbers you have at your disposal to make sure you know where your business has been and where it is really going.
I was really pleased to read his recommendation that entrepreneurs finance their business appropriately. Don?t take a dime of loans or investments more than you actually need (with some reasonable reserves included in that figure). If it is available it will get spent, and usually for some sort of overhead that you don?t need and you can?t afford going forward.
Some of his advice, however, is not consistent with my message to entrepreneurs. He suggests using vendors to ?finance your business.? Most of these vendors are also small business people, so I always suggest to treat them like you want to be treated by your customers.
He also urges entrepreneurs to avoid personal guarantees with bank loans. Good luck! This must come from his world of venture capital. This is not feasible for everyday entrepreneurs. Personal guarantees are a fact of entrepreneurial life during the early years.
His last piece of advice should go without saying, but given how many entrepreneurs I have advised who have some how missed this important point, needs to be said again. Pay your taxes on time! The IRS means business and some of their agents carry guns. Accountants with guns: think about it.