Today, it is harder than ever to start a business and succeed. Financial services options have become more complicated, and new regulations make compliance more challenging. Small businesses find it even more difficult to get financing and manage their cash flow to keep the company growing. To meet these challenges, small businesses need to be intentional about the financial services they choose and the advisors they partner with from day one.
In this article, we’ll share insights on how you can build a thriving business by focusing on your company’s financial strength with expert advice on how to manage cash flow responsibly, invest wisely for future growth, protect yourself from unforeseen risks and find reliable advisors if you need help along the way.
1. Cash Flow Management
When your company doesn’t have the cash it needs, growth can be stifled, expansion plans may have to be put on hold and you may have to lay off employees. When it comes to cash flow, there are two important factors to keep in mind: levels of receivables (how quickly customers pay you) and levels of payables (how quickly you pay your vendors). No two businesses are the same, so you’ll want to take specific measurements for your company to understand how much cash you generate and how much you need.
2. Protecting Yourself From Risk
When you’re just starting, it can be hard to find the capital you need to grow your business and get it off the ground. To help you get the funding you need, you may consider turning to a lender. These types of loans are typically unsecured or backed by collateral. The most common type of unsecured loan is a small business loan. If you have collateral, you have the option to take out an asset-based loan. Unsecured loans are often easier to get, but they also typically come with a higher risk of default. You may be able to lessen that risk by securing the loan with collateral, like the equity in your home or your car.
3. Investment Strategies
Investing is a key component of growing your business. It’s important to explore investment options that are both appropriate for your company’s stage of growth and aligned with your company’s risk tolerance. If you already have a financial advisor, you can work together to determine the best investment strategies to meet your short- and long-term business goals. If you don’t already have an advisor, don’t panic.
While there are a lot of exciting things that can happen along the way, there are also many potential pitfalls that you need to avoid. With careful planning and good financial management, you can minimize these risks and make your business as successful as possible.
By focusing on your company’s financial strength, you can make your business thrive. These five financial services are important, but it’s also essential for you to take steps to protect yourself from risk and ensure that your company can sustain itself through all stages of growth.