Opening a business is one of the most treasured aspects of the American dream, yet for far too many entrepreneurs it ends in heartache and sometimes financial ruin.

The number one reason that so many small to medium-sized businesses fail to make it past the five-year mark is that they encounter cash flow problems that they just can’t overcome.

At The Commercial Finance Group in Atlanta, we specialize in providing cash flow solutions, like factoring, so that companies can keep their doors open and supporting our local economy.

What you don’t know can most definitely hurt you in the business world, so let’s take a closer look at some of the most common causes of cash flow problems for small businesses.

1. Issues Collecting On Receivables

So many new businesses focus completely on getting customers in the door that they neglect the process of actually getting paid for the goods and services they provide.

“…cost to the business can be massive, and only compound as the company grows. Remember, once you make a sale you have all those costs of goods sold. If you don’t collect on that sale you’re actually worse off than if you never made the sale in the first place,” writes David Finkel for Inc.com.

2. Off-Kilter Pricing

Let’s say you’re good about staying on top of your invoices, but cash flow problems still abound. It could be because you’re not pricing goods and services in-line with your competition. Lowering prices to get clients in the door is a slippery slope to failure.

3. Skyrocketing Expenses

If it’s not a problem of money coming in the door, it’s likely a problem with how much money is going out the door in the form of expenses. Is each one of these expenses absolutely necessary? Could you save money by doing a few of these things yourself?

Running into cash flow issues is normal for new businesses, it’s what you do to overcome them that decides whether you’ll thrive or die. Contact CFG in Atlanta to learn more about how factoring finance can help you get over the hump.

Check out informational pages on factoring and receivables financing, as well as our blog on the differences between the two.

Then, pick up the phone or contact us online to speak with one of our lending solutions experts about how we can help improve your company’s chances of survival We’re here for you!