Charlie Crystle: when it comes to a cash, verify the numbers

Here's a great story from Charlie Crystle, one of the greatest tech entrepreneurs in Central PA (yes, there are some here in Silicon Pasture!). It's from his Digging In blog, essential reading if you're interested in starting a tech business here or anywhere.

Managing cash flow is an important practice to get to know early. It's pretty simple: you have your known ongoing expenses, known revenue (or not), and known investment (or not). You have to manage your cash--the combination of investment and revenue--to cover the expenses on an ongoing basis.

That's why hiring someone early on is such a big commitment. You're asking them to change their lives on your behalf, so you damn well better be able to make payroll.

I blew that in a big way once; I thought I had a certain amount of cash, and knew I had to contract the company to make the cash last, but then I got an email from my right-hand man informing me he had made a mistake--by $200,000. Oops is right. We laid 10 people off the following Tuesday.

Which raises another point: you're the leader, the CEO--you need to verify the numbers. I failed to do that, though my practice prior to that year was to know everything about finances. It was a mistake I still regret today.

[Remember, regret is not necessarily a bad thing.]