Cash flow squeeze is a common experience for many business. The problem may seem downright mystical, especially during an upward trend when revenue seems as though it should be adequate to yield cash availability. Listed below are some basic reasons why small business owners find themselves in cash flow squeezes:

1. Chasing unprofitable business by discounting and therefore eliminating profit margins.
2. Overhead that’s too high. It tends to naturally creep up if not vigilantly reviewed, monitored and controlled.
3. Payroll is too high. This is another area that naturally grows and should be vigilantly monitored.
4. Payment terms are too liberal, leaving far too much cash out of your use.
5. Account Receivables are not effectively and timely collected. This is a malady which frequently strikes small business, but it is curable.
6. Poor cash management. For example, spending too much at the wrong time, leaving yourself high and dry when you need the cash for something important.
7. No “rainy day fund” for emergencies which do happen.
8. Too much inventory, tying up too much cash in an unusable form.
9. Not knowing when to cut and run and continuing to spend on a losing venture, product or program.
10. Using very expensive credit facilities such as high interest credit cards, or worse, borrowing from the IRS by not paying payroll taxes. Ouch!
11. Debt based on previously higher revenues that is now unaffordable based on current, lower revenues.

This is where your cash is hiding out. Go find yours and improve your cash position immediately!