Food + Beverage News

3 Budget Challenges, 1 Simple Solution

3 Budget Challenges, 1 Simple Solution


Challenge #1 - Running Your Business

To run your business, you must analyze data to predict seasonality, demand, market changes, and economic swings. This forecasting can indeed help predict the future.
But even in the Digital Age, data is not infallible. For that reason, cash reserves for emergencies can help meet short-term financial needs – both foreseen and unforeseen.

Challenge #2 - Growing Your Business

When you are ready to grow, acquiring equipment, building out office space, and hiring staff can help your organization flourish. But expansion requires investment, which – again – can drain your cash reserves.

Challenge #3 – M+A

Growth through acquisition is still extremely prevalent in the food and beverage space. “Since the 2008 recession, companies have been hoarding cash, but many now want to spend the money,” said Gerry O’Meara, head of M&A at SunTrust Robinson Humphrey, in Forbes.
If an organization is pursuing an M+A strategy, they do require cash on hand to do so. Whether your company is looking to be acquired, seeking to remain independent, or hunting for prospective organizations to purchase, a strong cash position is ideal in this market.

The Solution: Sale-and-Leaseback

One recommended strategy to improve cash position is a sale-and-leaseback transaction. In a sale-and-leaseback, your company increases your liquid capital through the sale of assets, while still retaining the uninterrupted use of those assets.
Sale-and-leaseback is a simple transaction.

  1. Sell your capital equipment to a lessor

  2. Then the lessor reimburses your company 100% of the original purchase price of your equipment (without any interruption to its use)

Find out more about a sale-and-leaseback transaction and how your business can overcome any challenge that faces you in 2018: