Smart financial management is critical for any business. It is regardless of how big or small it is. Poor financial mistakes are one of the reasons behind startup failure. Most spend every bit of the cash reserve, leaving nothing for emergencies. It leads to a business shutdown in most cases.
For example, if you use capital for big purchases like equipment, machinery and other aspects, your cash reserve may decrease. What if you need urgent money to pay the supplier? If you have been delaying for a while, he may need one.