Having a clear understanding of cash flow management is vital to survival of your business. In fact a new survey has revealed that finding new business and managing cash flows are the major challenges for many small business owners.

Entrepreneurs are sometimes intensely focused in marketing, forgetting the importance of cash flow in sustaining the business. To compound this problem, many starting business owners do not have formal training in this area. If you do not have any cash to run your business operations, it will inevitably fold even if you already establish a good customer base.

Wealth Building World highlights the importance of cash flow and introduces the concept of Factoring as an effective tool to improve cash flow.

Setting accounts receivable at a discount is a means of financing called factoring or “accounts receivable financing.” Its been around for centuries and is a billion-dollar industry for large businesses today. And it is growing rapidly in popularity with small and medium sized companies. Factoring not only has saved countless businesses from going under, it has provided many more businesses exactly what they need to grow: cash to fuel the engine.

Simply put, factoring cash flow is about selling your accounts receivable at a small discount to interested investors instead of waiting for 30 to 60 days to collect your money.

Credit Card companies like MasterCard and Visa are the best examples of factoring. Say you buy at Nike and charge it to your Visa. Nike is paid instantly, even if you do not pay your credit card company yet. In return for this quick payment, Visa will charge Nike a small fee.

There are several financial institutions out there offering factoring cash flow to interested small business owners. Include this in the list of your options aside from financial institutions and venture capital firms.

Taking that big leap from employee to entrepreneur involves great risks and shift in perspective. After all, the financial concept called Risk/Return Tradeoff tells us that high risks or business uncertainties are often associated with high returns/rewards.

To manage the risks involved, we undergo a long transition as weekend entrepreneurs initially before going full time. Our homes become the focal of entrepreneurship, eventually paving way to the boom of home-based businesses. StartUp Journal presents 10 helpful tips for home-based entrepreneurs.

Do a detailed analysis of costs to figure out how much money you’ll need. Forecast three scenarios: a best-case, realistic and worst-case financial picture. Karen Belasco, founder and “chief cookie counselor” of Good Fortunes, a personalized cookie business in Canoga Park, Calif., said she wishes she had spent more time learning about cash flow and the bottom line when she started the company in 1995. “I really lost money for a very long time and we couldn’t figure out why,” Belasco said. “There were certain hidden costs we just weren’t seeing.”

Not all dreams can become a reality and not all business ventures can survive. According to Small Business Administration’s Office of Advocacy, only 44% of small businesses survive at least 4 years of operations. So, stay open, try to be very objective in making decisions, and learn when to pull the plug if needed.

Here’s a secret your your employer doesn’t want you to know. Having you work from home is generally far cheaper for them than setting up an office/ cubicle for you. Depending on the city you live in, the average non-executive career job might cost them $50-70/hour, maybe more. There’s the cost of electricity, office furniture, supplies, time wasted at the water cooler, the rent per square foot of your cubicle, your salary, and more.

So if you work from home, your employer might be able to pay you more, provided doing so saves them money. However, if their total monthly operating costs do not decrease, don’t expect a larger salary. More important than raw costs: can they trust you, and will you be more efficient working from home? Some jobs simply require being physically present at the office.

If you manage to convince an employer to let you telecommute, you also have the freedom to start your own entrepreneurial efforts at home. That’s a bit better than being a weekend entrepreneur.

If you’re already a startup entrepreneur with limited capital and are thinking of hiring, take into mind the above considerations. If you end up with an employee or contractor you can trust, seriously put some thought into letting them telecommute not only as a way to save on operational costs, but as a bonus for their good work. Those people already successfully working online know how to let their work prove itself.

As a bootstrapping entrepreneur, there will likely come a time when you either have to entertain selling your business or taking funding to continue operations. Your options for external funding include, but are not limited to, business loans, angel funding or venture capital (VC) money. Business Fund has two great articles about pitching to VCs and pitching to lenders.

While both parties have the intent of turning a profit on their investment in you, one may have the intention of taking your company to a level where they can sell it off or take it public. That’s typically what venture capitalists do. They are also often in a better position to understand your business than the average lender (from a bank or otherwise). So if they see the merit in your business, and you pitch them well, they’re more likely to invest in you than a regular lender. The flipside, of course, is what will you be giving up down the road?

Not every entrepreneur that starts a business with the intent of ever selling it, but for those that do, it’s not always emotionally easy to give something away. You created it. You’ve nurtured it from its infancy, kept it going. It’s part of you.

Sounds kind of cliched, but the feelings are true for many entrepreneurs. If you have a successful business, it’s likely someone else will see value in it and want to buy. But while it’s easy to visualize the payout and magazine covers showcasing you, for some entrepreneurs, it’s like selling your kid, as Wil Schroter says. And it might be even harder if you are staying involved in the business, in some manner, after the sale.

That’s not to say you shouldn’t sell your business, but think through the implications in terms of your involvement, your emotions, the different business culture - not just the fat check that comes with being acquired. If you have employees, they will be affected, too, and often without the benefit of a fat check.

If you do sell, learn to deal with the emtional aspects fast - especially the feeling of uncertainty of direction, now that you’re not completely in control any longer, if at all. If you stay involved in the post-acquisition entity, help your former colleagues and employees cope as well.