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CHAPTER 8 MASTERING YOUR MONEY
The way to run a business with very little need for cash is to
get your customers to pay you cash in advance. This way,
you will have the money upfront in order to finance your
operations. This is already standard practice in certain
industries like interior design, fitness/slimming centres, learning
centres etc… In other industries, do your best to persuade
customers to pay cash up front before goods are received,
in return for a larger discount.
At the same time, create a good relationship with your
suppliers so they can offer you longer credit terms like 90
days. In other words, you can use the cash generated from
your sales to pay your suppliers, reducing your working
capital needs.
5) Pay Staff & Services in Shares or Profit Sharing
One of the highest costs incurred in any business is manpower
cost. Instead of paying cash, offer partners and staff payment
in shares or percentage of profits at the end of each project.
Calculating Your Startup Costs
The next step is to estimate your total startup capital. Your
Total Startup Capital is made up of your a) Startup Cost and
b) 6 months of Fixed Expenses.
Total Startup Capital =
Startup Costs + 6 Months Fixed Expenses
a. Projected Startup Costs
These are the usual costs associated with a new business
startup (applied to Singapore):
238 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES
