Avoid the Cash Flow Crisis in the Start-Up Companies

Entrepreneurship is one of the most desired professions in this world. There are many people, who plan to start companies around the world. There is a tremendous pressure on the entrepreneurs in the initial stages of the business venture. The critical issue they face is the cash flow problem. This article gives you a brief picture on the cash flow crisis in the start-up companies.

Cash Flow is the money that comes into the business from the customers and goes out by spending on important activities in a specified period of time. Why most of the companies fail in the initial stages just because of the cash flow problem? The answer is simple and straightforward for this question. It is just because of concentrating on other insignificant things rather than finding customers.

Yes, finding the customer is what the solution for this problem. Until and unless the business owner finds the customers who pay the money for services, he will struggle in the cash flow crisis and that eventually leads to winding up the company. The customer is the only source to pump in the money to the business survival. You can get a business loan from a bank by having a comprehensive business plan but what is the use of the business loan if you don’t find the customer for your services or products.

Especially for service oriented firms, having initial customers are very important. If there are no customers, the resources in the company including the business owner sit idle and this is not at all a good sign for the company. So, get the initial customers to survive in the business.

Most of the people start thinking about setting an office without having customers in hand. This is a bad strategy. If you don’t have customers to pump in money, it is a foolish strategy to spend all rest of money of the office setting and other insignificant things. Just think for a while, which is the most important aspect; is it the customer or having an office? Of course, you need to have office to make sure you need to show your credentials to the customers but what the use of the office if there are no customers in hand. It is something like spending whole the money you are left with in the initial stages of the start up on insignificant things.


So, focus on getting the customers in the initial phase. If you get the customers, the customer money will take care of everything you need such as an office building, other resources. Finding the customers is the only solution to avoid the cash flow crises in the initial stages of the start up