Sometimes a small business is expanding and needs capital to grow, but just as often they’re using working capital to manage cash flow and regular business expenses.
Here are eight ways business owners are using their funding as a tool to move their business in the direction that they want to go:
1. Supplies for New Contracts or Accounts “To continue to serve the general contractors and maintain our overnight growth, I needed working capital to purchase concrete supplies.” Ryan Carter, Razorz Construction
2. Taxes “Our taxes last year were much bigger than previous years. We used a hefty amount for the taxes, but we also started our company fleet, put up a billboard, and ads on benches. If you take money out, it is really wise to put a large portion into marketing so it essentially pays for itself.” Alex Sherman, Eco-Friendly Maids
3. Staying Competitive “We needed working capital to add new products, remodel the store for a fresh look, and stay relevant in this new marketplace.” Mathews Chacko, Pakmail
4. Flexible Invoicing & Payment Schedules “We can take on new accounts with monthly invoicing. We have the opportunity to start a number of new clients’ projects, invoice for 30 days out, and give the clients we have 30 days to pay.” David Gallo, Bluestone Consulting Group
5. Managing Seasonal Ups and Downs “With a highly seasonal tax business, we struggled with how to meet additional expenses before seasonal revenue starts coming in. We were able to get our staff in early enough to train them, so we’ll be in great shape for the new season.” Jesica Abella, Abella Tax Services, Inc.
6. Adding Employees “I had an opportunity to hire a recruiter. I look forward to seeing her succeed and thereby doubling Ready Medical’s success. It will take pressure off of me and enable us to grow to the best level we’ve had yet.” Shannon Gray, Ready Medical Staff
7. Replacing or Upgrading Equipment “We bought a new walk-in, 10’x12’ refrigerator and modernized the restaurant area. We have an enthusiastic, successful Caribbean demographic in Brooklyn, and are happy to provide an authentic eating place for them.” John Carl Smith, Golden Krust Caribbean Bakery and Grill
8. Inventory for Peak Times of Year “We purchased inventory and used some of the funds to beef up our part time payroll account. We were all ready to go a week before the biggest cyber shopping event of the year–Cyber Monday.” Clive de Sousa, Glory Cycles
Bottom line: You might think of working capital as fuel to grow or as relief for lean times, but businesses are also using funding as a tool to manage the day-to-day cash flow.
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