It’s that time of year when people commit themselves to a healthier lifestyle. For the business owner, it’s also a great time to commit to a healthier cash flow.It’s all too common to look at cash flow solely from the ‘numbers’ perspective. Is there more or less incoming cash versus outgoing cash? While the numbers do tell a story, it’s important to note that they do not tell the whole story.
Ledgers are not known for revealing lost the opportunities poor cash flow causes. It’s hard to say what the loss of a particular customer will do to a business in the long term. Could that customer be one that stays with you through the years? Could securing a particular vendor or supplier be the partnership that propels you past the competition? What about the right talent or marketing initiatives?
Just like the goal of a healthy lifestyle, a healthy cash flow can be impeded by a myriad of different pressures. The difference is that attaining a healthy cash flow is simple, doesn’t involve a treadmill, and you’ll see dramatic results in a few days.
There are many different ways to obtain financing but not all of them are feasible or desirable. Some business owners prefer to avoid incurring debt such as a bank loan or credit card. Others may not qualify for financing. Still others considering an equity based approach would prefer to retain their ownership and assets that would be at risk in venture capital or asset based lending arrangements.
The cash flow industry is the solution to these issues. Based on the centuries old practice of leveraging ‘promissory paper’ in exchange for immediate cash, the industry has developed a host of flexible solutions.
There are many reasons that opportunities may be lost, but an unhealthy cash flow need not be one of them.
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[This posting is from a feature article of CapSource Funding's Working Capital Journal. For additional articles or to subscrible, visit www.capsourcefunding.com.]
