Money inside a corporation is special. It has one function and one function alone: make more money. This is not just a silly thing to say, it's the law! (I'm serious... have a look at "The Corporation" if you don't believe me). But more than that, business people see and react to corporate money in a much different way and that opens doors to "accelerate" the money and make it turn magically into more.

I'm assuming this whole series that you're a technologist who has a product idea you want to turn into a business. Let's say you put some money into the business. You are converting your "personal" money into "corporate" money and it undergoes a transformation and enters the ... secret life of money!

Once inside the corporate account, Every dollar must be spent be made in a way that can reasonably be expected to bring about a return in more dollars. There are many many ways to achieve that goal. Think of your dollars as little entities with a life of their own, trying to reproduce in a hard world. You've got to direct them carefully down the road to success.

One really obvious way is to spend the money on something called cost of sales or COGS which resolve into an immediate revenue. But quite frankly, if you're at that point you probably don't need my help any more. When you're starting out you need to take the money that you personally invested plus any lucky early customers and accelerate it, make it turn into as much more money as possible, as quickly as possible, to keep the company operating.

Your biggest expense right away is going to be Research and Development . R&D costs can sometimes be recouped directly from the customer by doing it as a consulting job or an NRE . Most of the time though, if you are making revenue, you've got to build in a price premium to cover your R&D costs indirectly.

Fortunately every dollar you spend on R&D is valuable not only to you, but to the overall economy in your area, and governments recognize that. In Canada we've got two programs called SR&ED and IRAP (your country probably has similar). Before you start your engineering, get these people to kick in $$$ . In Canada, IRAP will effectively match funds with you, if you can convince them what you're doing is going to "create wealth" for the country. SRED is even better because given that you write up your work properly, you can apply after you do it, and they are obligated to give it to anyone who qualifies. (I just finished a SRED application which will nicely help the bottom line.)

Then there's future money. Let's say you have a signed purchase order from a customer but it's going to take you a month or two to deliver the whole contract. A good bank (that understands and lives with your industry) will often loan you upfront some amount of that PO. So you can turn future money into present money . Find a good bank in your community by the way. There will usually be at least one bank that specializes in tech entrepreneurs or else you're starting your company in the wrong place. These are the people you should be banking with.

Investors are also a good money accelerator. Investors like to give money to companies that are already making money. Does that sound strange? What it means is that if you get paid by a customer, you should immediately go around and see who will finance you now that you are "making revenue".

(Incidentally, this is also one reason investors tend to move in packs. They like to see their money get accelerated as well.)

One last sure-fire way to increase the acceleration of your money was something that I never did until recently: make a budget . Now I can actually plan what I'm going to spend on ahead of time. What a concept. It also helps me figure out how much I need, and I can compare that with other people's conceptions to see if I'm in line or out of line. Finally, by showing my budget to other people, I have both discovered that I paid too much for something, and that I left out something that's very important. Better to find that out now than later.