If you are considering borrowing money from Count Me In, it is important to have a backup plan for how you might repay the loan or keep the payments current if your sales revenue drops.

Businesses often do not go as planned. Sales can be lower than expected, inventory costs may increase faster than sales, a delivery may be late, or you can get a large order and need all of your cash to purchase supplies to meet the order. The weather may turn bad and keep all the customers' home or the stock market might have a bad week and make everyone afraid to spend money. Many people spend all their earnings in the first two weeks of the month and do not have extra cash to make purchases later in the month. Anything is possible.

Here are some ideas of backup plans used by business owners:

Hold two months loan payments in reserve in your checking or savings account. Take money from the loan and early sales to reserve money for future loan payments when cash may be tight.

Start saving money by taking a small amount out of each sale or each deposit for your backup money. Some women take one or two percent of a sale and put this money into their emergency account.

Use a cashflow statement to anticipate when you might be low on cash. Compare your actual expenditures to your projections so that you can improve on your future projections. If you know a short month is possible, you may have to spread out how much you pay on your bills in that month and catch up in a later month when there is more cash available.

Make collections part of your work. Follow-up and make sure your customers pay you on a timely basis. Do not forget to send out invoices on a timely basis.

Hold a sale for your friends. You may end up with extra inventory and need the cash. Put on a sale in your yard, porch, or in some free space. Call your friends and ask them to bring a friend to the sale.

Find a way to cut your costs. You may have to put off the purchase of equipment or inventory until you receive your payment from a customer.

Take in a partner who buys into the business. You can sell a part of your business to a partner as a way to raise income. Your partner will then make money if the business does or would have a share of the tax write off if the business losses money.

Call the bank to let them know that you do not have the funds before you are late. Make arrangements to make a smaller payment, pay interest only, or delay the date for this month's payment. If you do this, make sure you make the payment date you arranged with the bank or lender.

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http://www.ka-ching.com/business/column/startup/yb_column_startup20.html
http://www.onlinewbc.org/docs/starting/failure.html