CASH BUDGETING - AN EFFECTIVE TOOL FOR A START UP TO SUCCEED

Abstract

Running a startup is extremely difficult, and not all startups can reach their
dreams. Statistics show that up to 90% of Vietnamese startups often fail in the
first or second years, meaning that the risk a startup faces is very high. To
manage one of the main and first risks that any startup can face is cash flow risk,
this research proposes a cash budgeting model, using both qualitative and
quantitative methods to analyze why a startup can be exposed to the risk of
bankruptcy after only one year of starting a business despite its profitable
business. In addition, this model can also help a startup knows exactly which
solution or combined solutions will help successfully handle cash flow-caused
risks both qualitatively and quantitatively.