Most people don't understand the value of cash when they go into business. If they did, they wouldn't waste it by purchasing things that they don't really need and deplete their start-up capital without getting their business any closer to viability -- that is, the point at which the company can sustain itself on its internally generated cash flow.

But it's not just start-up entrepreneurs who waste cash. The corporate landscape is littered with the corpses of companies whose leaders thought the good times would last forever and spent money they hadn't yet made on luxuries they didn't need. Make the money first. If you are smart, you will put some of it aside for a rainy day.