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> Then there was the time I wanted to hire my first full time employee. I was apprehensive to do it because I only had enough money to pay him for 2 months, unless I got another client fast.

> “Worry about that in 2 months,” Dad said.

This seems really dishonest. Yeah, everybody knows that startups are risky, but if you can't afford to pay more than 2 months of salary, then don't hire a full-timer. Either find a co-founder or hire a contractor instead.

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Not many companies could afford to pay their entire payroll for a quarter, if sales were $0.00 for that quarter.

Most companies also have steady revenue streams.

Or at least revenue forecasts.

Like other comments said, any company should have a revenue forecast. Companies that don't have a steady revenue stream will have enough cash from either capital reserves or financing. If you don't then don't hire a employee.

Companies that already have employees and forecast they cannot make payroll (say) 6 months from now will typically either borrow money or start lay-offs, not hire more people and worry about later. Failing to pay wages is a serious problem.

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