Often I hear of people who have invested in a home business, have performed their due diligence on how much it costs to set up the business and yet within a few months find themselves in a worse financial position than when they started. For all businesses whether they are small home business or multi-million dollar corporation, there is one law that runs throughout. This law states that “cash flow is king.”
Poor cash management is probably the most frequent reason for home businesses failing to succeed.
There are numerous examples of companies who have had full order books but who were unable to maintain themselves in business due to cash flow problems. If it is true for large corporations, then this is also true all home businesses where income is essential to pay for mortgages and to feed and clothe ones family.