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Question added to topic Grow Your BusinessSeptember 18, 2008

How much money will I need to keep monthly cash flow going?

If I bought a business with $581,000 in gross sales, cost of goods of $178,000 and $235,000 in expenses, how much cash would I need to come into the business and keep the cash flow going and maintain a good profit?
You're way off. Cash flow is about flow and timing: Factors like how fast you pay and how fast you get paid are vital, but you know nothing of that by just knowing the sales, costs and expenses.

I've done a 20-minute free video for you, online, that will explain how cash flow works. Please take a look at http://timberry.com/videos/. It's vital, too. Take the time to get this right, or bring on a team member, because cash is what runs your business.
Tim Berry is the president of Palo Alto Software Inc., based in Eugene, Ore., which produces business planning software. He is also the author of 3 Weeks to Startup and The Plan-As-You-Go Business Plan, published by Entrepreneur Press.

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