The #1 Piece of Business Knowledge Entrepreneurs Wish They Knew – Part 1
December 29, 2008
This series is fueled by a single question asked to successful entrepreneurs:
“What is the #1 piece of business information you wish you had known when you were younger?”
Today’s answer: Money management training.
What does “money management” mean? Here is some detail from successful successful Chicago-based entrepreneur Seth Frey:
“Sales and marketing were really easy to me. That just came naturally. As far as money management, that was harder. Even when I had my ice cream truck in college I still didn’t get it. I would think, ‘Oh, we have $1,000 in cash. Let’s pay off all our vendors.’ What I should have done is had more of a cash flow strategy. For instance, I should have extended terms with the vendors and held the rest as a cash reserve.”
Suggested readings and discussion questions for the classroom to the boardroom:“Wish you knew” Module #1.
1. What does Seth mean when he says he should have “extended terms” with the vendors?
2. Read the article at the below link:
http://ezinearticles.com/index.php?Protect-Your-Business-with-These-Cash-Flow-Rules&id=1031911
Design a discussion around the four header topics of the article (e.g., what does each category really mean, and proposed action steps for each). How does what Seth did seem to be in line, or different, with the advice in the article?
3. Read the below articles and/or search for additional ones using terms such as “cash flow”, “small business”, “best practices. Each participant should find their top article, and summarize the top 3 money management tips in that article. Narrow in on cash, accounts receiveable, etc. as needed.
http://beginnersinvest.about.com/cs/investinglessons/l/blles3intro.htm
http://entrepreneurs.about.com/od/financing/a/finstatelender.htm
http://www.balancepro.net/education/publications/moneytipssmallbusiness.html
Templates
Source: www.Toolkits.com
Breakeven, Cashflow, and Startup Cost Template
Source: Bay Area Community Foundation
Source: US Chamber of Commerce
Source: Microsoft templates
For more on financial planning exercises, see the Young Entrepreneur Foundation Entrepreneur in the Classroom “financial plan” curriculum in Module 3. Here is more on the free EITC curriculum.
Entry Filed under: Business exercises, Entrepreneur, Uncategorized. .
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1. Sue Massey | December 29, 2008 at 6:30 pm
Nice site. Theres some good information on here. Ill be checking back regularly.
2. Dennis Lankes | January 19, 2009 at 1:37 am
Great post. If “cash is king” then knowing how and when to spend it must be the signs of a great entrepreneur. Look forward to reading more on this site.
3. kathykormanfrey | March 4, 2009 at 1:48 pm
Dennis – Amen.