Half of Small Businesses Making at Least One Major Financial Mistake
Financial mistakes, such as failing to create a budget and ineffective cash flow management, are stunting small business growth, a new Viva Capital report shows.
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EL PASO, Texas, October 13, 2022 (Newswire.com) - Leading invoice factoring company Viva Capital says at least half of all small businesses are making one or more major financial mistakes. Issues like failing to create a written budget and mismanaging cash flow are among the most common. By diminishing financial strength and growth, issues like these are linked to over 80 percent of small business closures. Full coverage of the topic can be found in "10 Common Financial Mistakes That Can Hurt Your Business," which is now live on VivaCF.net.
Poor budgeting lands near the top of the Viva list, drawing on Clutch research which indicates that about half of all small businesses don't create written budgets. Because this step lays the foundation for strong financial planning and mindful spending, it makes it all but impossible for businesses to achieve their goals, the company notes. Issues related to cash flow are a major concern as well.
"Entrepreneurs are often fierce about their bottom line," explains Greg DiDonna, President and Partner of Viva Capital. "Profit is important, but cash flow management is equally important."
He says that cash flow management issues become more pronounced when a business experiences rapid growth. Because the business is reliant on the cash earned yesterday to cover the increased overhead of tomorrow, leaders must have a clear financial plan and ensure there's enough cash for payroll, inventory, and other needs.
"A business can be profitable, but unable to cover expenses," DiDonna adds. "When growth surges, sometimes watching every penny isn't enough. It's essential to have backup funding."
DiDonna notes that even if a business doesn't intend to dip into funding, it should be established with a funding source and know what its options are. Invoice factoring, for example, accelerates B2B payments. Instead of waiting months, the business can receive payment the same day the invoice is submitted. He says that because businesses choose when to factor an invoice and aren't required to jump through the same hoops that are required for a loan or line of credit, it's flexible and works for most businesses.
Those interested in learning more about invoice factoring are encouraged to request a complimentary consultation at VivaCF.net.
ABOUT VIVA
Founded in 1999, Viva helps B2B businesses of all types accelerate cash flow through specialized funding solutions like factoring, accounts receivable financing, and asset-based lending. Their simple qualification process makes it easy for small and mid-sized companies to get vital funding despite lack of credit or time in business. Additional information is available at VivaCF.net.
PRESS CONTACT
Armando Armendariz
915-615-6664
factoring@vivacf.net
Source: Viva Capital Funding