4 Cash Management Tips For Your Dollar Store Business

Let's face it cash flow management can be a major challenge for every new business. It is more complex for those who open a dollar store business. There are the standard problems of having enough money at the right time to pay rent, utilities and other monthly bills. There is the challenging of generating enough profit to have money left over for you to pay yourself. There's the challenge of having cash to purchase replenishment merchandise. Finally there is the challenge of having the funds to support the continued growth of your store. High volume, low margin businesses complicate the problem, making cash flow management a never-ending challenge. In this article I will provide 4 cash management tips for your dollar store business.

1. Start with a reserve fund. One of the biggest mistakes any new business owner can make is to start business without having a reserve fund in-place and available to support them during the initial twelve-months or more of start-up. Those who open a dollar store business are no different. No matter what you expected to happen, there will be the unexpected. It might be an unexpected winter storm that slows sales. It might be an unexpected increase in utility costs. It might be the need for more inventory to support sales. There is a long list of possibilities. The important message is to always have a reserve when you open your store. Be able to depend on that reserve when things don't go exactly as planned.

2. Know your financial status and results. Manage your dollar store business as a business. That means staffing, replenishment merchandise and other spending must be in-line with sales and profits. Work with your CPA to establish sales and spending goals. Develop strategies to achieve all of your goals. If that means cost cutting, then start examining costs to be cut. If it means adding staff to support growing sales, then get that staff hired, trained and in-place to support sales. Take the right steps for the right reasons to achieve the best results possible.

3. Set cash aside to keep merchandise on-hand. It's a very simple truth; no inventory means you will have no sales. Inventory replenishment will likely be your highest monthly cost. Be sure to develop cash management strategies so you never run out of the critical items your customers routinely purchase. That strategy starts by knowing the highest demand items in your store, and never having a customer walk-out because you allowed those critical items to become totally depleted. It means ignoring 'special deals' from suppliers until you are positive all routine replenishment costs have been covered.

4. Pay yourself last. That's right, the cruel truth is that you need to pay yourself after all other costs and expenses have been covered. Develop a plan to cover your personal expenses when the store profits don't provide a paycheck for you before you open your dollar store business. You don't need the added pressure of past-due person bills as you are starting and growing a new business.To your dollar store business success