Nataliey Bitature explains why small business owners run out of cash despite strong sales: customers haven't paid yet, but inventory costs are due now. Working capital finance and overdraft facilities can bridge the gap. Cash flow timing is the real problem.
How can your business have the strongest sales month ever, and yet you still don't have money for stock? This is a problem business owners face all the time. Let me tell you about the women in Hardworking Women. We have a tailor. She's made all these orders. Her customers are so happy, but now she has no fabric. Her mobile money balance is zero. Why does this happen? This is cash flow management. You give out credit, people haven't yet paid you, and yet you need to start buying stock for the next order. So this is where you need to have tools for cash flow management. Banks like Absa have working capital finance and overdraft facilities. Working capital finance is the money that rotates in your business. It doesn't go out. So basically, it's to buy things like inventory. You need to have fabric, you need to have stock so that you can continue operations without affecting your profits. And then overdraft facilities are like going into zero in your account. You go beyond zero, then you come back. You go beyond zero and you come back, because sometimes you just need a little bit of help before someone pays you tomorrow morning. These are important tools as business owners to understand and to use Because in business, cash is king.
