As a business owner, you know that even after you get your business started, you need to have money before you can make money. Your company needs equipment, inventory, and staff, all of which require funds that you have to spend before you to get to the point of earning revenue and turning a profit. However great your ideas may be, you first need the financial structure in place to bring them to fruition.
The money you have to manage your operational needs is called working capital. Working capital is the money you need to consistently have in place to manage your business and give yourself a chance to grow. It provides a cushion for you to maintain operations while you build, and a way to pay your staff and your outstanding obligations even if you do not bring in revenue right away.
Without sufficient working capital you are, to put it bluntly, sunk. As important as optimism is for business owners, it’s a recipe for disaster to try and run a business on the hope that receivables and paying customers will come in before you have to pay your bills. Imagine, for example, you are running a restaurant. You have to pay your staff for their time, and you have to pay your lease and your bills on inventory and any equipment you are financing. If you have investors in your business, you need to be able to show some value you are creating for them. Even if you are not generating enough revenue to cover all your costs, you must still be able to show your ability to work with the funding you have until enough customers come in to cover your costs and help you turn a profit.
This is not always an easy road. Your business plan might have been overly optimistic in predicting your revenue stream. Marketing or design costs might go beyond your expectations. You might have difficulty paying on the loans you have in place. Or, you may simply run into more competition than you expected. Any of these can throw your planning into chaos and make you struggle to turn the corner with your business performance.
Fortunately, there are ways to overcome these working capital challenges, and Kenmore Capital can help. We can help you look at the options available, including refinancing expensive loans or injecting your business with fresh cash through a new loan or merchant cash advance. We will analyze your current financial position and help you find the best solution for your working capital crunch. Instead of struggling with an untenable working capital situation, we will build a solution that not only relieves your stress, but lifts your business up.