Tight Times & Priorities

Every business has ups and downs. There are times of the year when cash flow is wonderful and times when cash is very tight. In my world, the bridal business, September through December is usually tough. "Bridal season" is over for the year, and next year's brides are not buying in droves quite yet.

When running a debt-free, cash-only basis, it is absolutely necessary to prioritize your payables during this time. You cannot pay invoices based on which vendor is "yelling the loudest". When you have a great day and have some cash, you must be careful to thoughtfully manage the influx of money so that you can get through next week, when you may not have those sales.

I have a prioritized list that I follow when paying bills and invoices. I work through the list as the money comes in. At the top of the list is rent and utilities. Most of my inventory suppliers are paid on a COD basis, but those that send me invoices are next on the list. Advertising, office supplies, and other non-essentials follow.

During our "high season", I try to pay all my bills BEFORE they are due. In this way, I am building a relationship with my vendors that allows me to ask for extra time and grace when things are slow. They know that I will pay and will pay early when I can.

When is your "down time"? Do you have a plan for it?