Cash Is Still King, But It Depends How And If You Use It

“Cash rules everything around me”. These lyrics are two decades old but the lesson goes back hundreds of years. Whatever your end goal, whether it be non-profit or profit related, cash, and your access to it, will be a critical driver of your success.

According to a survey, 82% of business failures are due to poor cash management and 30% of businesses fail because they run out of cash[1]. At the same time, 73% of small businesses actually have access to capital[2].

How can so many small businesses fail due to poor cash management if they actually have access to cash (i.e. capital)? The reason is straightforward: they lack the tools to use the capital effectively. Many times small business owners miss out on great opportunities to expand or invest in themselves and, by not expanding at the right time, they “give” that opportunity to a competitor.

A National Small Business Association report showed that 31% of surveyed small businesses that didn’t have access to capital were unable to grow sales. The vast majority of those small businesses had strong demand for their products and/or services but they were unable to come up with the financing required to meet that demand and increase their sales.

In both of these examples, the idea was a success but the inability to either raise capital or leverage the idea effectively ultimately lead to failure.

TC2 can provide this assistance to ensure that ineffective use of capital doesn’t doom your business.

[1]] Erin Griffith, “Why startups fail, according to their founders”, (9/25/2014)

[2] National Small Business Association, “2015 Year End Economic Report”

One thought on “Cash Is Still King, But It Depends How And If You Use It

Leave a Reply