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Go With the Flow

By: Julie Sturgeon
Posted: July 22, 2008, from the March 2007 issue of Skin Inc. magazine.

page 5 of 5

“They aren’t happy about being emergency relief,” Berry says. “If you rush in the morning you’re about to bounce a check, it won’t work.” However, if you present solid profit numbers from your business plan during the good times, you’ll likely convince your local banker to extend a revolving line of credit to draw on temporarily should things get shaky.

According to Magos, the bank determines your credit amount at 50% of inventory book value and 60–80% of receivables. It’s another case of planning pays, literally. “My commercial lender has restructured my business loans a couple of times this year to help me maintain my credit rating. Half of my credit card companies have been very helpful as well,” Gray reports.

Finally, there’s Adams’ solution that hasn’t failed him in the past eight years. “Punt!” he says. “Decide which bills are most important and pay those first, hoping to have a better cash flow the next day. Sometimes it’s putting off that product order you were about to make or placing a smaller order. You offer discounts to try to fill in your calendar of appointments. And you do what probably all small-business owners do: Pray and hope for a better day tomorrow.”