Business owners have unique cash flow needs. Here are some tips and strategies for business owners, entrepreneurs and those who wish to sell their business or otherwise enhance their cash flow situation.
- Understand and Calculate the Risks Associated with Your Financial Decisions
- Everything in life carries risk. The key is determining how to calculate and minimize the risks associated with your decisions. CMPS professionals help you evaluate the cash flow and home equity protection implications of various financial or business planning decisions.
- Understand that Liquidity is the Most Important Issue
- Liquidity is the ability to quickly convert an investment or business into cash, without losing any of the principal that you’ve invested. For example, a savings account is highly liquid. In contrast, a business is considered to have low liquidity because of the time it takes to sell the business and the unpredictability of the market value at the time you are ready to sell. The greatest business fortunes have been lost by those who overextended themselves and didn’t have enough liquidity to weather the ups and downs in the economy and business environment. CMPS professionals help you implement strategies to maintain high levels of liquidity to be able to weather the storms in the marketplace.
- CMPS professionals also help you implement strategies to maintain high levels of liquidity to:
- Take advantage of profitable business opportunities that present themselves. This will enable you to quickly purchase other businesses or assets at steep discounts that emerge when other business owners fail to plan properly for changes in the economic cycle or business climate.
- Pass on your business to your children or key employees without requiring a large upfront investment on their part. Having a high level of liquidity and implementing various cash flow strategies can increase your available options when selling your business or otherwise determining an ‘exit strategy’.
- Don’t settle for an undesirable financial strategy or short-term fix if you failed to plan properly for a career change or downward swing in the economy or business environment. CMPS professionals help you implement a step-by-step plan for how to re-establish your financial footing after going through a rough time in your business. This may involve:
- Financing in stages – a refinancing or debt restructuring plan that takes place over time.
- Sale/Leaseback or Rent-to-Own strategy – a way to keep or purchase a home or business real estate when you can’t qualify for traditional financing options. The Sale/Leaseback strategy can also be used to enhance your liquidity situation and limit your legal liability before a lawsuit or divorce if your business owns commercial or industrial real estate.
- CMPS professionals bring a team approach to your situation by working with qualified CPAs, CFPs and attorneys.
Click below to download the free report that illustrates some of the mortgage, cash flow and home equity planning strategies to better help meet your unique cash flow needs: