This is how to keep cash flow stable when customer orders are few and far between.
Many small business owners are used to playing the waiting game when it comes to getting paid by vendors – it’s a fact of business life. But how do you stay in good financial health when your vendors are enormous companies that do everything slowly – including buy your products and pay the bills?
“Over the past three years, we had only two new contracts, but this year we’ll have 10,” Rich says. “We’re a low-volume, high-margin company. That means when large companies want our products, we can charge a decent amount of money – but it also takes a lot of work before we get paid. The profits are good, but we have to wait for them.”
“One build requires a computer processor that has gone end of life, so we decided to make an end of life buy to support our customers for a number of years – which required an upfront investment of about $50,000,” Rich says. “This buy enables us to keep building product for at least the next 3-plus years.”
Sometimes, forward planning means reducing expenses, which can be tough when the costs involve employee salaries. “At one time I had as many as 10 employees, but when the work slowed down, there wasn’t enough for them to do,” Rich says. Running his business with fewer people helps keep the bottom line healthy – and he can bring on independent contractors for a few months at a time when orders are due.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
The Clever French Grandma Trick to Keep Fruit Flies AwayThe French grandma's clever trick to keeping fruit flies away.
Read more »
After heart attack, campaign battles to keep Bernie Sanders in presidential raceWith all campaign events canceled after an unexpected heart surgery and nothing ...
Read more »
Mattis warns 'ISIS will resurge' if US doesn't keep pressure onFormer Secretary of Defense James Mattis warned 'ISIS will resurge' if the US does not keep the pressure on, days after the White House announced US forces in northern Syria would pull back in advance of a planned Turkish military offensive
Read more »
In debt trying to keep up with the KardashiansSeeing celebrities, or even peers, eating out, going on vacations or buying clothes creates a 'keeping up with the Joneses' mentality that could have long-term negative consequences if you're not careful.
Read more »
28 Things For Anyone Stressed Out By Work To Keep At Their DeskI'm definitely *not* coloring while on this tense work call, how dare you even suggest such a thing.
Read more »
Blind Beekeeper Relies on the Sound of the Swarm to Keep Her Hives HappyWhen Aerial Gilbert was blinded by tainted eyedrops in 1988, she thought she’d have to give up beekeeping. But she didn't: “I can hear ... if there are other bees trying to get in the hive, or if it’s too crowded or too hot or too cold.” KQEDnews
Read more »