Cash is king – this was our mantra in teaching the basic business start-up course at my group in Wharton Entrepreneurial Programs. There’s no arguing with this one; without cash, you cannot pay your bills (or yourself). You can have the greatest looking business in the world, but if it’s not generating enough cash to pay the expenses, you won’t have a business for long. That being said, credit is also very important. Invariably, your projections will not be dead-on – there will be some variability. It is at these times that you would be very wise to have a credit facility (or facilities) in place, so that your lack of working capital will not put you out of business, or at the mercy of your other creditors, and you’ll be around to fight another day. It is of course easier to obtain credit when you don’t need it, so don’t wait until things get tough to look for credit; get the umbrella before it starts raining..
