It's compelling, I know. Your Point of Sale system tells you that you qualify for more money than you've ever taken before. And it will be in your bank account tomorrow! I've done this several times. It really will be in your bank account tomorrow, but be careful. Nothing will sink you faster than this money.

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In this episode we dispel a myth and define the three core SBA products. The Microloans, 7(a), and a 504. Take some time to listen to this and do your own research on the SBA. They're a phenomenal tool for growth-minded business owners or business owners who just want to refi they're debt and lower their monthly obligations.

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If you don't keep your books, we can't answer this question. So please keep your books. If you hold too little cash it shows that you're either reckless or not hitting necessary revenue. If you have too much it tells me you don't have vision for excess cash. Or possibly your threshold for risk is pretty low. Either way, your cash holding strategy tells us a lot about you.

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The Acid Test is like the current ratio except it doesn't account for inventory. This tells you us what happens in the event you can no longer convert your inventory to cash. This means we are only accounting for cash and receivables when assessing your cash situation. We want you to be able to cover current liabilities without having to sell more inventory.

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When analyzing an existing business, I always start with the Current Ratio. This assumes you keep good books. If you do, this ratio tells me if you're holding a reasonable amount of cash. It might show you're insolvent and it might show that you lack vision because you have too much cash. But we can't analyze it until we know it.

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The myth is that if you're good at your craft you should start a business. This is a myth. If you're a good plumber, then focus on plumbing. Running a business requires a business partner long term. In the short term you can do it all probably. But not for long.

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Real estate is a growth tool for business owners. And not just real estate investors. Every business owners needs real estate to leverage for growth capital. The first question a banker will ask after establishing the use of funds is 'do you have any real estate'?

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Sometimes people who love you and want to see you succeed also want to give you money for your for your dream. Take it well. Hire an attorney. Get the right paperwork. Treat it with respect. Pay it back.

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Nothing is as important to as cash in the bank. Phil Knight from Nike in his book Shoe Dog said to always pay your most important supplier first and on time. Do that. Keep them happy. Oh, and know that there's a huge difference between when a bill due versus when a bill is late.

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Everyone wants to have a great idea. And everyone wants to make money on their idea. But very few know how to navigate the distance between the two. It's hard. It's a grind. But learn to traverse it, and you are more likely to make it happen.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit joshrosenthal.substack.com