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Nine Common Cash Flow Mistakes Every New Entrepreneur Should Avoid

One of the biggest challenges for new entrepreneurs across the board is learning how to manage their finances. This is especially true of cash flow management. If you’re not used to handling a business budget or invoicing, it’s easy to lose track of how much money is coming in versus going out of the business.

Because cash flow is such an essential indicator of a company’s overall financial health, it’s important to learn how to master best practices and avoid critical pitfalls. Below, nine members of Young Entrepreneur Council shared some common mistakes they’ve seen entrepreneurs make with their cash flow and how to avoid them as a new business owner.

1. Spending Money Before You Have An Established Business Model

Don’t spend money before you’ve established your business model or figured out “what works.” A lot of entrepreneurs are eager to hit the ground running, but a methodical approach is preferred. Take your time to establish the right product-market fit and marketing channels before scaling up your spending. Too many entrepreneurs burn money way too fast, limiting their runway. As a small business, it’s important to keep your runway as long as possible as you figure out what works best for your product and business. – Andy Karuza,


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