The Wilson Group

5 of 5 Ways to Optimize Small Business Cash Flow: Refinance Your Business Debt Many business owners have to leverage debt to build inventory, make a key hire, expand their space, or meet payroll. Though it is not preferable, high-interest credit card debt is often the resource available to the business owner. If you find yourself caught under high-interest debt, understand that you are not alone and there are ways to improve your situation. First, work with an experienced business/commercial loan officer to consolidate and refinance old or high-interest debt. Next, do you have vendors who offer a discount for early payment? Take advantage of these relationships to create more cash flow and boost your credit with key vendors. Finally, use the equity you have in your assets to pay off high-interest debt or create much needed business cash flow. If you enjoyed this series, check out TheWilsonGroup.co for more educational content.

4 of 5 Ways to Optimize Small Business Cash Flow: Do NOT Keep Too Much Cash on Hand Cash is king, but you can have too much of a good thing. Cash that is sitting on the sideline is not helping you AT ALL. In fact, during times of inflation, cash is actually diminishing in value. I typically recommend creating a nest egg equal to six months of overhead. This helps you ensure that the business is healthy and can operate under unforeseen circumstances, like the current supply chain issues we are all too familiar with. If you are sitting on more than six months of available cash, reinvest in the business. Another recommendation is looking at the credit cards you use. In the competitive credit environment, there are reward programs that will be a great benefit to your business. Whether you are in a cash back matching program or you are gaining travel benefits, business reward programs will have a positive impact on your bottom line.

Many small business owners lack the discipline to continually reinvest in their business, sacrificing cash flow and growth for lifestyle. By general rule of thumb, reinvest 25% of your profit back in the business. Can you improve equipment, technology, personnel, location, signage/advertising, etc.? The reinvestment in your business will minimize taxable income and help you create growth and future cash flow. For more information on this topic check out the blog linked below.

Tax laws change from year-to-year. If you are not already working with a tax professional, we strongly recommend you find a trustworthy professional to help you take advantage of tax credits and deductions available to your business. Some of the common deductions or credits to consider: If you are taking home excess household income, minimize your tax burden by putting this money toward employee retention plans, including deferred compensation. Reduce your tax bill with tax loss harvesting. Sell some investments at a loss to offset gains in another investment class, minimizing your profit and therefore, your tax obligation. Are you currently renting your space and showing a profit? Invest in commercial real estate to increase your business assets and offset taxable income.

?? 1 of 5 Ways to Optimize Small Business Cash Flow: Repurposing Lazy Dollars ?? Lazy money is money that is not focused on growth, money that is not making money or doing anything other than existing. Do you have a balance in a money market account or savings account? Converting lazy money into active money will likely create a better return in the business than it would in a low-interest account. Find lazy money in your business?: -Look first at your money market and savings accounts -Reallocate retirement funds/qualified dollars to use for inventory or advertising -Audit your Group Benefits for potential cost savings/reallocation -Are you carrying too much Inventory? Sell at a discount (not a loss) to increase cash on hand To learn more, check out the video linked below and stay tuned for part 2 next week!

The long-term health of your business is largely dependent on your ability to manage cash and liquidity. As cash is your primary means of paying for the products and services your business utilizes, the ability to effectively manage cash and liquidity helps you secure business needs and avoid unnecessary debt and obligations to creditors. More cash on hand can lead to greater investment in products and services, generating more sales and perpetuating reinvestment and growth. In a 5-part post series, we will cover five strategies that savvy business owners use to optimize their liquidity and, with cash on hand, better manage their essential resources. Available exclusively on our educational resource page The Wilson Group, follow now and join us next week for part 1 ????

A few weeks ago I stopped by Silhouette on Site to check in and have a coffee with one of our clients Laura Pascazio and was treated to a tour of one of the most charming and Charleston-esque offices of any of my clients. I mean look at the place! Check out more photos and info about Laura and her amazing business where her team provides a unique experience for brides and grooms on their big day, on our LinkedIn newsletter this month. From hair and makeup services for weddings, special events, editorial and video production, to a luxe place for both parties to relax and get ready-- this place and this team are an absolute gem. Thanks for having us Laura! #clientspotlight #supportsmallbusinesses #charleston