Here is Part 5 of the 5 Most Common Cash-Flow Mistakes that Small-Business Owners make…Not keeping a cushion of cash on hand

5. Not keeping a cushion of cash on hand

No matter how many safeguards you have in place to protect your company’s cash, hiccups in cash flow are a business reality. This may be no big deal if you have a cushion of savings on hand.

But if your company is working from a zero account balance, one slow sales month could mean instant disaster.

To safeguard your business from cash-flow issues, maintain an account balance equivalent to at least two months of operating expenses. That way, even if you experience unexpected stalls to cash flow, you have reserves in place to protect yourself.

Cash-flow issues are one of the greatest challenges of business ownership. But if you stay objective about your business, rein in unnecessary spending and stay alert to potential pitfalls, you’ll be head and shoulders above your business peers in your potential for long-term business success.

This snippet is thanks to, and written by Jared Hecht