Keep the cash in for long term success

Increasing numbers of small firms are taking too much cash out of their business according to Trevor Williams of The FD Group.

Experience has shown that in a fast changing world, cash is king. Keeping hold of it will ensure that your business can survive the downturns and the lean periods. It also allows for continual investment in the business in terms of assets and more importantly in the people.

So make sure that you take out only what you need after having thought through what the long term needs of the business are. After all it is this that keeps the cash flowing in every month.

Some pointers as to how to manage the cash include - avoid the lavish life styles, stick to the knitting and avoid investing in other peoples ideas, go for the long term, invest in the talent in the business.

The boats, the holidays, the jewellery are all justifiable after years of hard labour, but just make sure that they don't jeopardise the capital value of the business.