The squirrels have been out in force lately pulling acorns down from the trees. They seem busier this year than in past years. And if you believe the news, it is supposed to be colder and wetter in the Northwest than in past years. It makes sense that the instinct is to stock up on an appropriate level of supplies to get through the winter. As these are grey squirrels, they actually remember where they buried their nuts (according to “Grey Squirrels Remember the Locations of Buried Nuts,” published in Princeton University’s journal “Animal Behavior”) and will be able to find them when they need them.
An area that is not always thought through adequately in business is the rainy day fund, the availability of cash when you need it. Depending on the type of business you are in, the seasonal and cyclical nature of the market will cause swings in cash flowing through your business. It is important to understand how deep and wide the downtimes can be. This allows you to know how to minimize cash outflow when times are bad. It also tells you how much cash you need to have available and for how long. When thinking through this, all sources of cash should be considered, including credit lines and the ability to reduce working capital. By going through the exercise ahead of time, you will know if your sources of cash are adequate or not. If not, you have the ability to secure those sources before you need them. How are you making sure you are prepared for a rainy day?
You must be logged in to post a comment.