Every business owner dreams of a business with lots of cash and positive cash flow. With this type of business, the owner can reinvest in the business, take distributions, and pay off debt. The options are endless. The problem is, most business owners don’t know which levers to pull in their business to increase cash. They ultimately wind up feeling confused and frustrated, sometimes lying awake at night wondering how to make it happen. Every business owner deserves to have a business with a strong financial future.
Recently, I worked with a professional services practice that relied on insurance company reimbursements for their cash flow. Insurance companies are notorious for slow payments, often taking 60-90 days to remit payments. To cover payroll at times, this business owner had to borrow money from a lender and pay 30% plus interest.