Often Risk events may result due to lack of cash or may result in pressures on your cash flow. One thing I have learned many times in business is when you need access to Cash you can never get it. You see no one wants to share your Risk or transfer your Risk to themselves. This is in essence what happens when you are in a bind and need access to Cash. I would highly recommend that you get access to cash WHEN YOU DON’T NEED it. This is exactly the time you will be able to access it. Whether this is in the form of a Business Loan, Overdraft facility, or even other Fund sources.
I have learned this many times in business. So now look for and get facilities in place not to use – but “Just in Case” rainy day funds. Whenever I do this – the bank always advises me that I don’t seem to need the Cash. They are correct – I don’t need it when I get it – but may in the future. The more effective you are at utilising this in your business approach gives you a great way to potentially handle unexpected events.
I have a policy of building up cash reserves and access to Cash which can cover all fixed expenses in my business for at least 12 months. This provides you with not only peace of mind but the ability to adapt and evolve if something out of left field takes place.