Working capital is that life-giving force that sustains and drives your business. Without it, your business can’t function. Very often, small businesses find themselves panting along, gasping for air. So how do you get more of that working capital that will help your business breathe?
This is the amount of air available for you to breathe in and out. It is the cash-on-hand, which is used by the business in its day-to-day trade and operations. Working capital is calculated as the current assets minus the current liabilities.
Ensuring you have enough cash on hand to take on any business-enhancing opportunities is key to your business’s success. It is what ensures a healthy business. And business health equals growth.
Working capital finance is best used for your day-to-day dealings. Cash-on-hand can assist with buying stock, paying salaries, utilities and even refurbishing your store. Perhaps you are short-handed and need to hire new staff. If your equipment needs to be upgraded or you have a great idea to expand your offering, you need available funds.
Each of these requires cash to action. Buying on credit (where possible) can send your business into unnecessary debt. Putting you under pressure and impinging on plans. Nobody likes having to breathe into a brown bag to catch your breath. Cash-on-hand is the big stress reliever for any business.
Always handle your own oxygen tank. If you went deep-sea diving you wouldn’t rely on your buddy to fill your tank with that trusty O2, would you? Your business is the same.
Working Capital management is vital for the success of your business. Even if you have an accountant managing your books, you should be there too. Ultimately you are the boss of your business, and how it inhales and exhales its assets and liabilities on a daily basis, is ultimately your responsibility.
Luckily there are options. Funding partners are out there ready to throw you a raft so you can come up for air. Trusted lenders like Merchant Capital can provide business funding options that are tailor-made to work in line with business operations. Helping you breathe easy and plan for the long term.