Always Be Prepared in Advance for Cash Shortfalls
Because of lumps and bumps in doing business, any gym or fitness club can suddenly be faced with the danger of cash shortfalls. Don’t let this common reason for most businesses to fail deter you from succeeding because there are plenty of finance products in the industry equipped to help you cover cash shortfalls even at the most unexpected of moments.
Fast Solutions for Cash Shortfalls
A bank overdraft is basically a temporary loan one takes from a financial institution. Most businesses opt for overdrafts during tight cash situations because it guarantees that you will be able to pay your creditors and staff on time and provides leeway so you can negotiate better terms with your suppliers (for larger orders or projects). Most banks also offer flexible payment options, so you can pay what you can, when you can as long as you do not exceed the overdraft limit.
Business credit cards
Various credit card types are available in the market – including cards that are meant to help businesses get through emergencies or critical situations. We recommend subscribing to a business credit card according to your priority (which is to handle cash shortfalls), so one with a low rate credit card that keeps your business in check and interest-free features would be preferable.
Extend your terms
Instead of borrowing money to tide over the financial situation, you might want to consider extending your payment terms to your creditors instead. Internally, you could hold off on making repayments until the very latest day possible while externally, an honest conversation with your suppliers may be long overdue. Discuss about how you can clear your debt within a comfortable timeframe and once you do reach agreeable terms, be sure to never make it a habit. After all, cash shortfalls may be a common occurrence for small gyms and fitness clubs, but it should never be a reason to lose control over your cash flow.
For more inspiration on escaping cash shortfalls, please read this article by Deborah Sweeney featured on Forbes.