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Plan Wisely to Avoid Cash Flow Crises

Written by Mark Meloy, CEO and Board Member

“We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.” – Michael Dell, Founder & CEO, Dell Technologies

In my years of business banking, I’ve seen a lot of passionate business leaders. In fact, that energy, drive, and ideas are traits we actively seek out in clients. Sometimes though, that level of enthusiasm means a singular focus on one part of the company, one metric, or perhaps not enough time spent risk planning and thinking about the whole financial health and outlook of the business. Unexpected cash flow problems are issues we see quite often, even in mature businesses.

Cash Flow Challenges

According to the Small Business Credit Survey conducted by the Federal Reserve, the majority (61%) of small businesses with employees faced financial challenges in the last year, including:

1. Credit availability or securing funds for expansion 44%

2. Paying operating expenses 36%

3. Making payments on debt 25%

4. Purchasing inventory or supplies to fulfill contracts 17%

As you can tell, cash flow is often a culprit in the most common issues business leaders face. That’s why we put together the article, “Why Cash Shortfalls Happen,” to help you anticipate when your business might experience a cash flow crisis and some common ways to plan ahead using specific financial tools so you’ll be prepared if they arise.

After all, looking at the speedometer is a lot of fun until you run out of gas. We can help you keep a spare gas can around to smooth out your ride, avoid financial setbacks, and stay on the course you’ve mapped out for years to come.

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