How Do I...Manage a Cash Flow Crisis?
Rusty Luhring has started a few firms -- some flourished and some didn't -- but since he started his first business at age 25 in 1979, he's learned a few things. Watch this video of his top ten tips for managing cash flow:
Luhring's latest venture is Luhring SurvivalWare, where he holds the position of "survivor in chief." He has always built his businesses around his passion for creating financing modeling software, and his latest venture is no exception. SurvivalWare helps small firms and entrepreneurs predict their financial needs.
In these turbulent economic times, his business is doing well. He employs three part-timers, but considers himself a "solopreneur." He has one customer that uses his product to determine his cash flow every 30 days; other customers like to look about 13 weeks in the future. The software's users range from two-employee firms bringing in about $40,000 in annual revenue to 10-worker businesses with $1 million in sales. A competitor is the ubiquitous Microsoft Excel.
He's also had success with his software in the franchise market. Alphagraphics, which has about 250 locations, was keen to use his product to create a common accounting format for all of its franchisees.
"It helps small business owners project whether they can meet payroll or plan how to survive if a line of credit they were expecting doesn't come through," said Luring when we met at a local Alexandria, Va., coffee shop to discuss tips he's learned for how to survive during a cash flow crisis. He knows what he's talking about -- he bikes on his 10-speed everywhere, not just because he likes it, but to save money too.
Luhring certainly knows about business crises. A firm he started in the 1980s became embroiled in a lawsuit with a book publisher after Luhring questioned whether he wanted to use the publisher to sell his software book. The suit was settled, but Luhring says the incident -- and the $100,000 he had to pay in legal fees -- was "character building."
His experiences have made him empathetic to the cash-strapped. As he says on his Web site: "It is hard to be rational when it feels like the world is closing in, like you are traveling 70 mph about to hit a brick wall...You don't know how you're going to come up with the rent due in three days, not to mention payroll the day after. You've got some receivables, and there are sales trickling in...Don't feel guilty about running low on funds...even if you raise big bucks up front, it is never enough."
By Sharon McLoone |
October 30, 2008; 11:02 AM ET
How Do I...
Previous: Reference Guides, Blogs and Policy Papers | Next: Senators Push for More Transparency in Procurement Plan
Please email us to report offensive comments.
The comments to this entry are closed.