Where do I stand in my business; can I really afford to carry out my plans? That is the question often voiced by small business owners. How do you know if you have the “extra” money to invest, to place an order, to buy equipment, or to bring on a new service provider to relieve the pressure?
Things might seem to be humming along in your business. But how are you doing, really? One of the biggest surprises to business owners is that even if you have both sales and profits, you might not have enough cash to make a planned purchase or even to pay your bills on time.
The reality is that even after you’ve successfully delivered products and services to your customers, you might not be paid on time. Little things – including delays add up silently yet quickly – then BAM! You’re out of cash. When you’re short of cash, the likelihood of making sub-optimal business decisions skyrockets. How can you prevent unpleasant surprises in your business? Financial ratios. [Read more...]