Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
1, If you have multiple loans, consider consolidating them into one. Making a single payment can lower your monthly expenses and free up cash.
2, If you aren’t using a business credit card, you may not have established any business credit. You’ll need to establish a credit history if you need to go through the process of getting a loan.
3, Pay bills with your credit card. It can allow you to keep cash in your accounts for up to 30 or 45 days longer than paying by check or making electronic payments.
4, Rewards add up. Find a credit card that pays rewards and reap the benefits even small payments can help reap.
Cash flow can make or break a company. Mismanagement often leads to business failures and cash flow visibility — the ability to track and monitor it in real time — can be a major concern for many small businesses. So what challenges are companies facing? And how can they improve their cash flow? Here’s what I’ve learned.
At its most basic level, cash flow refers to the amount of money coming into and going out of a business. That’s certainly important for day-to-day functions such as making payroll and paying vendors. It’s also important, in two ways, for being able to afford big opportunities.
The most obvious is that if you have money on hand, you may be able to afford new equipment, an expansion or other improvements to help your business grow.
The other way relates to credit. If a lender sees that your company has healthy cash flow, they are more likely to approve a loan or line of credit.
Inflation is a big concern for small businesses right now, which is no surprise. When goods cost more, that impacts the bottom line. As a result, some businesses are overextending themselves. Some are running cash flow too low and becoming too reliant on loans. And with high interest rates, some companies are trying to pay loans off sooner, which is draining their cash flow. The COVID-19 pandemic is still affecting some companies, as well. They’re experiencing delays receiving international payments.
Knowing how to best manage incoming and outgoing money is essential for any small business. Many business owners have extensive expertise in their area of business, but not necessarily in their business finances. That’s why having a trusted banker makes sense. They can take a close look at your business and uncover specific ways to improve how you manage money.
While there are certainly more than three ways to improve cash flow, I want to focus on what I see from a banker’s perspective, not on business goals like increasing sales and strengthening profit margins. Here are three moves that can often help.
With every purchase you make, you can earn rewards—money you could use to keep up with rising shipping costs, payroll or new equipment you need to grow your company. Yet while most businesses have a credit card on hand for large purchases, many don’t use it for everyday purchases. Why not earn rewards on those small expenses you pay every month?
As you’re thinking about other purchases that you could switch over to credit card payments, consider utilities such as electricity, phone, internet and water. Software and other subscriptions are also easy payments to transition. Check with your vendors. You might be surprised how many are willing to accept credit card payments.
One example: A company wanted to find a way to treat their employees with a holiday party. We scrubbed their vendor list to determine which vendors would accept credit card payments and helped them switch to credit card payments for everyday expenses. The company discovered it could fund the entire party with the rewards they had earned.
With cash flow having such a significant impact on business, it’s worth prioritizing these steps. With more purchasing power, companies have the strength to weather challenging times — and grow in strategic ways.
