Customer Channels & Operations Management, Business Analytics & Data Management, Risk Management & Regulatory Compliance
1 minute read
Oct 21, 2020
Written by: Shawn Sweeney
Business owners spend their days developing smart strategies, taking calculated risks and working hard to grow successful companies. When they decide to leave or retire, the last thing they want to see in the rear view mirror is their company starting to stumble. That’s why they should plan from launch day for two eventualities: their own personal retirement and the business’ future success.
In my latest discussion with the Forbes Finance Council, I offered timely insight on establishing a credit line when business is good and why businesses need a strong strategy for when an owner retires.
The best time to prepare for a company’s long-term financial health is when your business is running strong. The more business is booming, the better the terms and conditions you’ll be eligible for when applying for a line of credit. A good rule of thumb is to have three months’ operating expenses in reserves. If business hits a bump in the road – including the unexpected, like a global pandemic – then that credit line can serve as a cushion, enabling the business to continue funding growth opportunities.
Looking for other smart tips from Forbes Finance Council experts? Check out our forecasts for the banking industry here.
Most of us are familiar with the old saying “Hope for the best, prepare for the worst.” Although the origin dates back to the 18th century, the message could not be more relevant today, especially for business owners. From employee turnover to insufficient capital, there are numerous potential threats that could morph into financial disasters overnight. So, when Forbes Finance Council asked me to weigh in on simple steps businesses could take to prepare for such problems, I gladly answered the call.
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Customer Channels & Operations Management, Business Analytics & Data Management, Risk Management & Regulatory Compliance 1 minute read
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