Small to medium-sized businesses form the backbone of the American economy. These companies create jobs, pay taxes, and because they’re often locally owned, reinvest a portion of their revenue into the same cities and towns in which we live.
The goal of starting a small business is a lofty and noble one, but not every individual is prepared for the challenges they’ll face during the execution of this idea. Presented with larger and more complicated problems than they ever did while running their household, many small business owners unknowingly make cash management mistakes that ultimately spell ruin for their company.
As a trusted provider of factoring services in Atlanta and beyond, The Commercial Finance Group is dedicated to being a partner for small to medium sized businesses. Whether you’ve run into cash flow problems due to the management mistakes below, or are simply looking for a way to capitalize on your opportunities for growth, we are here for you.
Keep reading to discover some of the most damaging cash management mistakes made by small businesses, as well as the ways that factoring through The Commercial Finance Group can help you recover from them.
Are You Making These Cash Management Mistakes?
- Overestimating Future Sales – No matter what industry they’re in, every business owner is taking a chance on a dream. When you’re dreaming it’s hard to be realistic, but relentless optimism can get you into trouble where your financial future is concerned. Learning how to forecast realistic revenue in your first month, quarter, or year, is absolutely essential, but difficult. Finding a business mentor or financial advisor can help keep you on track.
- Spending Too Much, Too Early – Sure, we all know the “it takes money to make money” mantra of the business world. However, inexperienced entrepreneurs sometimes forget that all startup expenses are not created equal. If you deplete too much of your working capital paying for consultants, B2B service providers, and superfluous assets like TVs and art for your office, you may not be a business owner for very long.
Ignoring Past-Due Receivables – When you go to the store, you have to pay for the goods you’ve chosen before you can leave the premises. Failure to do so results in an immediate and probably unpleasant conversation with a security guard. Unfortunately, the same rules don’t apply for many of today’s service providers. Customers can take weeks sometimes even months to pay bills, and if you’re not staying on top of these past-due receivables, you could be on your way to a dangerous cash flow situation. Thankfully, receivables factoring from The Commercial Financial Group is a way to turn these unpaid invoices into working capital.- Not Saving For A Rainy Day – No matter how robust your business growth is or how relentless you are about collecting past-due receivables, there will be a point at which your cash flow falters. This is why it’s so important to squirrel away some resources that can be utilized in a pinch. Do your best to maintain an account balance equivalent to at least two months of operating expenses, but if you can’t, contact The Commercial Finance Group in Atlanta. We have experience helping businesses through tough times with our full menu of cash flow solutions.
Ignoring Past-Due Receivables – When you go to the store, you have to pay for the goods you’ve chosen before you can leave the premises. Failure to do so results in an immediate and probably unpleasant conversation with a security guard. Unfortunately, the same rules don’t apply for many of today’s service providers. Customers can take weeks sometimes even months to pay bills, and if you’re not staying on top of these past-due receivables, you could be on your way to a dangerous cash flow situation. Thankfully, receivables factoring from The Commercial Financial Group is a way to turn these unpaid invoices into working capital.
