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Budget Busters March 29, 2008

Posted by Amanda in Business Tails.
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A big thank you goes out to Helen for bringing this article to my attention.   Posted over at Bankaholic.com this article gives some good tips on how to keep your small business afloat.  It has some basic concepts such as start small but think big.  There is however one point I would modify slightly.

6. Paying your bills late.

Whenever possible, meet your expenses with the cash that you have one hand. Rack up big bills on that shiny new business credit card and you could end up putting as much money towards accumulated interest and late fees as you are towards growing your business.

Now, paying your bills late is bad.  Nearly everyone knows that.  However, spending the cash you have on hand could be a liquidity error.  Credit cards can be a good tool when used correctly. My mother (and she is of course the expert on everything) always told me that using a credit card to make purchases is fine… as long as I pay it off every month.  Now, that may seem to defeat the purpose of charging it in the first place, but it keeps that much needed liquidity in the bank for the longest amount of time possible.   Just keep track of your expenditures and don’t go overboard… but they cover that in points 1, 2, and 5….

So here it is: 8 easily avoidable causes of business debt

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