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In the hit movie, Wall Street, Gordon Gekko (played by Michael Douglas) said to his protégé, Bud Fox (Charlie Sheen):
“The key to the game is capital reserves. If you don’t have enough, you can’t piss in the tall weeds with the big dogs.”
How’s your access ability?
We hear it all the time – cash is king. But it’s not just cash that matters; it’s also access to capital.
Large companies generally have that. Small business people often don’t.
So it’s crucial to manage your cash flow wisely. Make sure you’re getting a return on every dollar that goes out your door. Because…
Even if an outlay goes to your Income Statement as an expense,
it should still deliver a return to you or it’s not worth spending the money.
In addition, build up your reserve borrowing capacity. Protect your credit rating like you would any other asset. Then you’ll be able to take advantage of opportunities when they present themselves.
Watch your debt ratios so you could always tap into some money if need be. But also be aware that …