Every business needs positive working capital. That’s especially true when it’s possible that a recession could be on the horizon—but it’s also true even when times are booming. Working capital opens doors. It creates potential and possibilities. Here are some of the core reasons why businesses need to have working capital on hand.
You want to reach the next stage of your business. But how? Sometimes, the old adage is true: You have to spend money to make money. Working capital makes it possible for companies to start scaling.
About 67 percent of small businesses fail within their first decade of existence, states the Small Business Administration. A huge part of the problem stems from ineffective planning that leads to ineffective use of the business’ working capital.
If you own a business of any sort, you can probably use an influx of cash. You might need this extra money to add inventory, hire employees or to make your store more appealing to your customers. The reasons to secure a considerable amount of cash are seemingly endless. This money is available in the […]
Changes in working capital are quite common in the business world. Such a change is best defined as the alteration to net working capital between accounting cycles. Net working capital is equal to the difference between existing assets and existing liabilities. Every business manager is intent on minimizing upward alterations to working capital in order […]
So you started a transportation business. Things are going well, but you can tell you need a little extra something to really help the business take off. What you need is working capital. Working capital is the bread and butter of any business — it’s the cash you have on hand for your day-to-day operations. […]
As a business owner, you know how important it is to have the right equipment and a well-trained staff on hand. The problem is it can be difficult to afford the best of the best when you’re just getting started or when the season begins to slow. So how do you keep yourself afloat? The […]
Working capital is the main financial driver that allows a business to meet its current obligations and continue operating. Calculating the amount of working capital is very simple. Investigating the components and application of working capital creates a deeper understanding regarding the viability of a business and the soundness of its future.
Not having a working capital strategy is like trying to hit a target with your eyes closed. You may be able to shoot, but you’re very likely to miss the target. The same thing goes for businesses that do not have their business goals enabled by a working capital strategy.