By Rich Bond
You want to expand your business, but you don’t think you have enough working capital.
That can be a faulty assumption.
If you want to increase your working capital without borrowing in these times of increasing interest rates, you can:
- Reduce Accounts Receivable – get customers to pay more quickly.
- Increase Accounts Payable – pay your suppliers more slowly.
- Increase inventory turnover.
All three of these objectives can be measured and monitored. Once they are, the results can be astonishing.
Take this $30 million manufacturing company.
The owner hired me to recruit a new Controller. One of the first things the Controller did was to study the firm’s inventories in detail and share his findings. Within a year, he was able to reduce inventories by $1 million, while improving the on-time ship-rate from 85% to over 90%. Customers were happier, and the company suddenly had an extra $1 million in free cash that they used to grow sales to $50 million!
Contact me if you would like to talk about hiring a financial professional who can potentially help transform your business.
