Covid was bad. Like really bad. However, it also made many of us stronger. Businesses that were not harnessing technology the way they should, harnessed it better. Businesses who didn’t hone in on their customers honed in much better. Marten Abrahamsen, CFO of FundBox says that small business resiliency can help us weather these challenging times.
Watch our video interview here.
But I’m getting ahead of myself!
At times I find the array of funding options available to small business owners quite confusing.
Venture funding. Which is using an investor’s money to start a new business (often) or grow an existing one. You both share the risk and success of the new venture.
Debt financing, where you get a loan or line of credit to expand or possibly even start something new. This debt financing includes credit cards as well.
Working Capital Financing is what Fundbox specializes in, explained Marten.
One of the toughest challenges for smaller companies is that their customers, especially B2B customers, might take 30 – 90 days to pay them. Not cool. This jams up cash flow.
Before getting paid, you get opportunities to serve more businesses. However, you don’t have the cash on hand to buy the raw materials (or services) needed to serve the new business.
What to do?
This is where Fundbox comes in, able to help businesses bridge their cash flow in between you waiting for invoices to get paid.
Some businesses are cyclical. They have great cash flow in the Winter or Fall but the Spring or Summer are slower. This is also a situation where Fundbox can help.
These Are Not Normal Times
In normal times cash flow is not easy to manage, but it’s even more challenging today.
Covid lockdowns have had ripple effects on the economy. There are whispers of a recession that’s here (not technically) or coming soon (many are predicting).
Getting raw materials from overseas is very tough – supply chain shortages.
What to do?
Marten advises a few things:
– Increase your cash balances
– Cut your fixed costs
– Hone your marketing strategy
Look at these challenging times as opportunities. How can you strengthen your business? How can you get your financing in better shape? Is your team operating at maximum efficiency? Are they happy? Who are your customers? How are your best customers?