Finding Cash

The single issue that many small businesses have in common is cash flow. Somehow cash inflow just never seems to match cash needs – even when the company is showing a profit. Because the issue is so pervasive and of such concern to business owners, it often amazes me when I see cash lying around.

OK, it is not the cash that is scattered throughout the warehouse, but stuff that can and should be converted into cash.

Last week during a meeting with a client, I took a stroll around his plant while he was on a phone call. I came across a large lathe that, judging from the dust and the fact that it was not connected to power, was not being used and had not been used in some time. I suggested to the owner that he consider selling the lathe. He admitted that it is no longer needed and that he could get several thousand dollars for it. Hmmm. Several thousand dollars could make a dent in substantial debt that he is carrying.

During a tour through the warehouse of another client, I was shown a substantial amount of outdated inventory. Not only was there “cash” on the shelves, but the inventory was taking up badly needed space. A brief conversation revealed that the material could readily be sold in a warehouse sale, and might net up to $10,000 – money that could be used for funding the inventory for a new line.

With prospects that current economic conditions will result in even worse cash flow, business owners need to look critically at every piece of equipment and excess or outdated inventory. If it is not needed and can be converted to cash, then it should be sold.

Will Limkemann
Limkemann Business Advisors
440-871-0976
www.neobizadvisor.com