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One of the major concerns of small businesses today is adequate cash flow. Sometimes firms suffer from a negative cash flow, especially in the early years of their operation and during prolonged periods of cyclical downturns in the economy, as was the case recently. The problem is compounded when small firms are undercapitalized and have inadequate net working capital. Normally, as profits are generated, these conditions are alleviated. However, unless a small business can manage to get through such periods of adverse cash flow, it may be doomed to failure.

For many businesses the investment in inventories, measured in absolute amounts or as a percentage of assets, turns out to be quite significant. According to recent statistics, the average nonfinancial US corporation has a larger percentage of its funds invested in inventory than in any other current asset. In fact, the role of inventories for many firms in the wholesale and retail trade is even more pronounced where many firms have in excess of 40 percent of their total assets invested in inventory.

The increase in multinational companies and the rising level of global interdependency has brought to light the crucial need of producing business graduates who can successfully function and compete in an international society. It has become imperative that colleges of business not only produce graduates with all the qualities that make good managers in national companies but also with those qualities that will enable graduates to function in multinational companies. With multicultural employees increasing in number in American companies, international companies moving into the US, and US companies functioning internationally, it is imperative for today's business graduates to develop international business skills.

The growth of firms is fundamentally based on selfreinforcing feedback loops, one of the most important of which involves cash flow.When profit margin is positive, sales generate cash, which may then be reinvested to finance the operating cash cycle.We analyze simulations of a sustainable growth model of a generic new venture to assess the importance of taxes, and regulatory costs in determining growth.The results suggest that new ventures are particularly vulnerable to public policy effects, since their working capital resource levels are minimal, and they have few options to raise external funds necessary to fuel their initial operating cash cycles.Clearly, this has potential consequences in terms of gaining competitive advantage from experience effects, word of mouth, scale economies, etc. The results of this work suggest that system dynamics models may provide public policy-makers a cost-effective means to meet the spirit of the U.S. Regulatory Flexibility Act