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For most businesses, cash flow is not always a sure thing. You have months of surplus where it seems like the profits are rolling in, and then you’ll have a whole season where you can’t seem to get in the black no matter how hard you try. This might not seem like the best business model, but it’s actually pretty standard, and chances are if you’re reading this, you’ve been in this boat.

The question, then, is how do you manage your cash flow during those lean times? Obviously, it takes a great deal of budgeting and planning to make sure you can get from one dip to the next and still stay afloat. But how can you properly budget in an unsure environment like this? And how can you be expected to grow your business when your income is so erratic?


As a business owner, the concept of budgeting should not be new. However, the idea of budgeting when you can’t always be sure how much is coming in – and knowing that’s what’s coming in is probably not enough to cover all expenses – can make even the most savvy financier break out into a sweat. So, how can you overcome this obstacle?

One way suggested by many is to implement what is known as a “zero-sum” budget. This is a slightly different sort of budget system that can take a few months to set up. There are two main things to know about this sort of system:

1)         In this system, you make every dollar work for you. There is no “extra” money that languishes in your account, waiting to be spent on frivolities. Instead, every single dollar is budgeted and has a purpose, whether it’s going to bills, going into savings or paying down debt. When every dollar is accounted for, you end up with zero dollars left over at the end of the month (hence the name “zero-sum.”)

2)         The end goal of a zero-sum budget (besides zeroing out at the end of each month) is to basically get one month ahead, so the money you are making and spending now is covering next month’s bills. Being one step ahead requires a bit of planning and guesswork, but it gives you a cushion to help get you through those lean months.

Of course, this is where your seasonal boon comes in play. You can’t possibly get one month ahead when you’re barely scraping by. But what if you took a portion of your profits from your busy months and set them aside? Eventually, you can use that to help get ahead and implement a zero-sum system, which can be a key factor in your business’s overall longevity.

This works well if you are anticipating remaining flat year over year, but if you want to continue hitting your revenue targets, say at a first store location, but you also want to expand through pop-ups, additional locations or through expanding your online sales, you may need additional access to funds.

The Role of Lending

Of course, these tips can help you stay afloat and in business for years to come. But, if all you’re doing is surviving, how can you possibly expect to grow? This is when it becomes important to seek additional resources. Thankfully, there are many different options available to the small business owner to help them grow and expand their business. Some of the options that could be helpful include:

1)         Business Loans. These loans are straight-forward, and are designed to help you inject some much-needed money into your business. Whether you’re looking to expand to a new area, finance a new construction project, buy commercial vehicles or purchase saleable goods, you need to be able to do this while still taking care of all your already-existing expenses, including operations and payroll. A business loan is the traditional place to start.

2)         Lines of Credit. Similar to a loan, but with the benefit that available cash renews as you pay down the previous draw, a line of credit is often a more preferable option because, with this arrangement, you only end up borrowing what you actually need. Instead of receiving a lump sum, a line of credit is available to you when you need it – but you are not obligated to pay back more than you actually end up taking out. This is a good option when you know you need access to money, but your spend is variable throughout the year.

3)         Real Estate Loans. If you are looking to buy more property or expand to a new location, then you might want to consider a real estate loan, as opposed to a regular business loan. This type of loan gives you more reasonable payment options that are fixed and made clear up front, and often come with smaller payments due to smaller interest rates and a longer repayment schedule.

4)         SBA Loans. Another option is the Small Business Administration loan. This loan, fully backed by the Small Business Administration, recognizes that small businesses are the backbone of our country’s growing economy. Because of this, an SBA loan provides excellent options and terms for America’s small business owners who meet the qualifications.

If you would like to know more about budgeting for your lean months, or about what financial lending options might be right for you and your business, please talk with our brokers about your options today.