Factors Most Likely to Cause You Financial Problems
When you own and operate a small business, inevitably there probably will be times when you run into some financial roadblocks. The important thing is how you handle these setbacks. The last thing you want of course is for a financial hiccup to turn into an outright problem.
So what are some of the factors that could actually cause you to fall into financial hardship…Below are a few things to watch out for as you try and navigate your company out of the red!
Avoiding Financial Problems
Is your budget realistic? Often businesses get into trouble when they create a budget that is based upon expectations for sales and/or revenue that just doesn't materialize. Think long and hard about what your company can actually expect to do in terms of years and also monthly sales. Look at past performance. You might also consider local competitor performance in forecasting these numbers. The key is to be realistic!
Are you handling your debt? In other words, are you getting your business in over its head in terms of how much debt you're taking on? You definitely want to be careful with overburdening yourself in this capacity. Getting buried in debt could very well be the financial hole from which you might not escape.
How do you manage cash flow? Cash flow represents the pace at which money comes into and subsequently out of your business. If it is going out faster than you collect it, it stands to reason that you may have a bit of a problem on your hands. Pay attention to the details here; make sure you understand exactly when suppliers need to be paid versus when invoices will be collected.
At First Union, our job is to help you stay afloat—even during those financial setbacks. We'd love to discuss your business and see if our lines of credit, merchant cash advances or short term loans could be the financial solution you need. Call today!