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Smoothing Out Cash Flow Could Save Your Business

A sad and oft-repeated truth is that half of all new businesses fail within the first five years. In fact, all too many fail in their first decade.

Although many factors contribute to business failure, a common culprit is poor cash management. Farmers, retailers, and car dealers are especially aware of seasonal fluctuations in cash flows. But to some extent all businesses, large and small, must deal with the uncertainty of fluctuating sales, inventories, and expenses. An owner-manager who engages in wishful thinking about profitability, who becomes lackadaisical about money flowing through the business, is often headed for disaster. By endeavoring to smooth out cash fluctuations, prudent managers keep their companies strong throughout the business cycle. (more…)

Purchase Order Financing

One of the ironies in business is that if you want to increase revenue, sometimes you need to borrow money. The reason is simple: growth is expensive. Suppliers will almost always require payment before you have received money from sales. (more…)

How To Improve Your Credit Score

The days of easy credit, offered to anyone who can breathe, are history. In this sluggish economy, lenders want to know whether borrowers are likely to stay current on their loans, mortgages, and credit card accounts. Banks and other lending institutions are looking more closely at credit scores, the numbers that (in theory at least) predict the likelihood that a borrower will default on his or her outstanding debts. As a result, knowing your score and ensuring that it’s climbing toward the upper percentiles should be a part of your regular financial planning. (more…)

Protecting Your Business With Credit Policies And Procedures

If you were in the money lending business would you hand over money to people without arranging a repayment contract with them? It doesn’t sound too smart, but most businesses are in the money lending business in just this way. In effect, by offering credit to your customers, you are providing them with a loan. Companies that lack sound credit policies and procedures take unnecessary risks and can jeopardize their very existence. (more…)