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One of the major challenges of starting a business is finding the capital to get the doors open. What is equally important-and often overlooked-is the need for sufficient cash reserves with which to operate the business until it begins to generate revenue. Opening your doors with no money in the bank could mean you won't stay open for long. But how much money do you need?
To find out, you must formulate cash flow projections. These will help you determine how much money you need to operate until your business begins to turn a profit, and whether or not you can truly afford to start the business you've planned. Effective cash budgeting often makes the difference between staying in business and being forced into bankruptcy.
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