Five ways to manage cash flow for your business
(NC) Managing cash flow can be a challenging part of running any business. When you operate a seasonal business, maintaining cash flow can be particularly tricky.
“Cash flow shortages can be the cause of business failure, even for companies that had great potential,” says Sarah Adams, vice-president of Small Business at RBC. “Planning for the ebb and flow of a seasonal business needs to be done early and often, before you find your business in a cash crunch.”
To help maintain cash flow throughout the year, Adams provides five tips:
1. Determine your cash flow needs – Calculate your start-up costs, review your financial forecast for the busy season, and calculate your cash flow based on the entire year, including the off-season.
2. Budget carefully – Creating and sticking to a solid budget is necessary to ensure you can pay for regular expenses such as maintenance, taxes and equipment financing when you have no funds coming in.
3. Establish good credit – Having good credit is especially important for a seasonal business, so be sure your bills are paid on time and maintain your strong credit rating.
4. Consider financing options – Talk to a financial advisor about an operating line of credit, business credit card, term loan, leasing, and business loan insurance.
5. Make use of the off-season – After a busy season, owners may look forward to some well-deserved downtime. This is the best time to review the past season, plan any changes, and prepare your marketing efforts for next year.
More information is available at www.rbcroyalbank.com/business
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