So what is working capital?
Every business needs working capital regardless of whether they’re brand new or celebrating their 10th anniversary. A regular amount of cash is required to make recurring payments, cover unexpected costs, and purchase basic materials used in the production of goods. However, this is the bare minimum for what a company needs to function day-to-day.
Let’s assume you’re a small business owner and you need to grow if you want to keep up with industry demand. There’s a lot of opportunity out there, and working capital is the key to converting that opportunity into revenue. Working capital can be utilized to hire more employees, buy more storage space or purchase trucks or other equipment.
Are you already overwhelmed by all of the business rolling in?
While this sounds like a dream to a young, green entrepreneur, creating manageable growth is the first step to ensuring long-term success. If it’s not managed strategically, you could either spread yourself too thin or miss out on a lot of lucrative opportunities.
Are you lacking the tools you need to do your best work?
If your productivity isn’t efficient, or you’re not marketing yourself properly because you don’t want to spend a little more money, you might be spending more than you’re bringing in. In that case, it might be time to re-evaluate your current operations and give yourself more options with your budget.
The good news is there is ALWAYS business to be made. It’s vital you take time to plan, do things right and not exhaust your valuable resources.