For richer, for poorer, for better, for worse. If you own a small
business, these familiar wedding vows might signify more than
promises to a spouse. They might describe your relationship with
your business as well. And with good reason if your personal
financial well-being is closely tied to how well your business is
doing. A strong cash flow is good for business and good for you. If
your company’s cash flow isn’t as healthy as you’d like it to be, here
are some things to consider.
What you don’t know can hurt you, especially when it comes to cash
flow. If you’re not already checking them, start generating cash flow
and cash balance reports on a monthly basis. If your figures are “off”
for even a few months, find out why. A problem could be lurking.
When things are slow, developing new business opportunities is
critical to your cash flow — and perhaps, your company’s survival.
But it’s also critical when things are good. You can’t afford to be
complacent about the future. If you stop devoting time to growing
your business, your success may be short-lived.
As a small business owner you have invested your own money into
your business. Establishing a limit of how much of your personal
assets you can comfortably invest in your business is vital for you to
avoid additional risk to your personal finances. Your business may
encounter periods when cash is needed, and many small business
owners instinctively dip into their own personal accounts to help
their business. This could become problematic. When you have your
own business you are responsible for the debts of that business. It
is important to keep this in mind as you evaluate any difficulties that
may arise. If you just go for a quick fix to a problem and don’t look
for the cause, you are sure to encounter trouble. Evaluating issues
and making adjustments will have better results than perpetuating
things with a quick fix. Though it is not an easy fact to acknowledge,
sometimes the adjustment is closing the business. Continuing to
put your own personal assets into your business, when it is above
what you can comfortably handle can lead to financial failure for
your business and you personally.
Even if you’re doing everything right, you could still hit a rough
patch. Or, an opportunity might come up that requires some quick
financial maneuvering. Instead of using your own money, consider
using a line of credit. For maximum flexibility, establish a line of
credit for your business before you need it. If you wait to apply until
you’re in a bind or a hurry, timing to review your application may not
work for your needs.
To learn more about CNB Business Financing, call (585) 419-0670
to speak with a Relationship Manager to discuss your current or
future lending needs.