Budgeting for Growth: Improve Cashflow

Checking Up on Your Business Budget

82% of businesses that fail do so because of issues with their cash flow. This means it’s extremely important that you’re consistently monitoring your budget and making changes when necessary. The more detailed this plan is, the more likely your business is to thrive and even grow during the more difficult times.

Here are some factors to keep in mind when creating, reviewing, or adjusting the budget for your business:

Identify Risks

There are many risks that may affect the revenue of your home improvement business. This can include supply chain disruptions, changes in demand, economic downturns, and more. Having contingency plans in place for these incidents can help you prepare for some of the more common risks. It’s also important to take other types of emergencies into account, such as natural disasters, accidents, damaged equipment & hardware, and more. You should have both the necessary insurance and cash on hand to handle these situations.

Consider Bad Months

Apart from everything listed above, there may be times when you’re just not closing as many jobs as you normally do. Identify areas where you can cut back on expenses before this happens, so you’re prepared. Take note of additional resources that can help keep you afloat during these slower times.

Create Financial Cushion

Just like with your personal finances, your business should have a savings account of at least six months’ worth of expenses. This can help you manage slower months or take care of a portion of some of the other types of emergencies we listed. It may also be helpful to have a line of credit that is only to be used in the event of an emergency.

Select the Right Business Partners

Having the right partners can help your business during the tougher times. For example, Regions Home Improvement financing has over 20 years of experience in home improvement lending. We’ve been by the sides of our contractors as we’ve navigated the changing economy through the best of times and the worst of times together. You’ll be assigned your own relationship manager who understands what makes your business unique and can help you come up with customized plans, plus you get fast funding with us! Funds are sent to your account via ACH – usually within 24 hours of homeowner approval.

The Next Steps

Looking for even more resources to help grow your business? We can help. Check out our Ultimate Guide to Growing Your Home Improvement Business. There are several downloads that are available right now and more are on the way.