The # 1 Challenge for a Small Business Owner

Many times I will be on the phone with a client and I will ask, “What is the health of your Business?” More often than not, the client will respond “Sales are doing great!”.

I will then politely respond, “that is great, but it isn’t what I am asking you” and then the client will be a little confused.

I then say “Don’t get me wrong, Revenue is an integral part of any business and without it, you do not have a business, but what I am asking you is the health of your business. The health of your business goes way beyond just sales. Sales is important, but what about the controls over books and records? What about managing expenses and taxes? Are you controlling all administrative aspects of your business? How is your cash flow and Liquidity?”

The answer I get on this varies but suffice to say most business owners focus on revenue rather than controls. This leads me to the  # 1 Small business destroyer- Liquidity and Managing Cash Flow. These are 2 different topics but are heavily related. You can have a business with good cash flow and no liquidity, but it is rare to see in the Small Business world. Liquidity can help your Cash flow.

Let us look at the general definitions of these 2 topics:

Business liquidity is determined by how quickly a business can convert its assets into cash.

Cash flow refers to the net balance of cash moving into and out of a business at a specific point in time.

So a business can have great sales, but if clients are taking their sweet time in paying you, your cash flow is going to struggle. As they are paying on terms, the receivable becomes the asset and your liquidity will depend on how quickly you can convert them to actual cash. Many businesses struggle with this, as while they are waiting for payment, they still must meet their expenses such as payroll, rent and more. Receivable Finance would greatly assist in this scenario to improve liquidity. Many Business owners stress about how they can keep up with expenses. If you have a Liquidity Tool, you will not have to stress about expenses.

Having a liquidity tool such as a Line of Credit or some asset based financing available is critical for the ongoing success and future growth of any business.

Having and using Liquidity are both vital to the continued health of your business. You do not need to fully use your Liquidity, but you should always have it!

AFS specializes at assisting clients to understand this. We will explain how to obtain it, how to use it and how it can help you grow your business.

If you would be interested in a Free Consultation, simply contact us or call us at 866-751-4999.



Bob Alexander

Bob Alexander is President of Alexander Financial Solutions, LLC. He is an expert in obtaining Financing and Working Capital for Business Owners. AFS provides all Asset and Cash Flow Lending. Bob has global experience and proven Leadership skills in Risk Mitigation, Balance Sheet Management , Process Improvements, People Development, Infrastructure Builds and maximizing profitability.
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