if you are in any business you do need to have a few grand as a float. it is no good living on the edge, one slip and you are down.
You can run a business for years without making a profit, but a problem with cash flow can take you down in three months.
As for the non/late payers, use a contract. It'll take you a few minutes to a couple of hours to set up the template. Once that's done you're sorted. For all the work I do I give them a quote in writing, once that's accepted I add the dates and payment schedule to it. Before the job starts they get two copies of the full quote and a copy of the terms and conditions. If I don't have my signed copy in my hand the day I rock up to start I don't start.
The first thing that does is weed out chancers, if they're not prepared to sign the contract then I have no intention of working for them. The second thing it does is demonstrate my honest intent in that it shows exactly what I will be doing and how much it will cost them. The third (and arguably most important) thing it does is completely remove any doubts or uncertainty should things go tits up.
So for example, the payment schedule on a larger job like an extension is 30% when we start work, 30% when the groundworks and drainage are complete, and 30% when the building is complete with walls, roof plastering etc. That allows the customer to keep 10% until they have BC sign off and snagging is done.
In the terms and conditions it states "all payments to be made within 7 days of invoicing". That obviously helps by ensuring they and I know when the money's due. However it has another less obvious benefit in that if I don't get the money for two weeks after invoice they are in breach of contract. I wouldn't make a fuss over a delay like that, but it does mean that I own them from that point on as the contract has been rendered invalid by them. It's never come to it, but from a legal standpoint that sort of thing can save your business.
Bit of a long post, but it's an important and often overlooked aspect to running a business.
Of course if everyone was honest and above board with everyone else it wouldn't be necessary. Sadly that's not the case.