CASH IN THE BANK 315
Cash in the bank
Finally, your plan is approved. Your balance sheet has changed. The total of debt or equity
has increased and cash at bank has been boosted by a similar amount. This cash will soon
run down as you convert the new-found liquidity into fixed assets, inventory and oper-
ating costs. The challenge is to move it through your profit and loss account and back
on to a growing balance sheet as cash or investments on the assets side and a matching
increase in retained earnings on the other side. The business plan’s job is not done yet.
It is time to take a look at how you use the plan to run a successful business. You have to
prove that your plan will work. Chapter 13 takes you through that process.
Talking about good friends, if you are working with partners in any new
venture make sure you know them well. In fact, right at the outset before
you write your business plan and start to look for finance, draw up some
sort of partnership agreement between you. The stress of getting funding or the
temptation of a large amount of money finally in the bank can make people do
strange things. I’ve seen desperate men siphon off seed capital for personal use,
crooks run off with a business plan and start their own business, and boardroom
coups aimed at obtaining a bigger share of the pie for the perpetrators. And it’s not
just the money. The second largest area of dispute is intellectual property: which
partner actually owns the ideas, trade names, logos and website domain names.
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