Floor Plan Your Inventory for Proper Cash Flow

NextGear Capital Helps Assure Dealer Success

You run a great busi­ness.  You find the right cars for your cus­tomers.  Your cus­tomers are hap­py and you make a good liv­ing.  Sure it’s hard work and long hours but you love what you do and you are a true entre­pre­neur – the back­bone of the Amer­i­can econ­o­my.

Your book­keep­er tells you that you are mak­ing mon­ey and prof­itable.  But do you ask your­self “If I am prof­itable why am I always stretch­ing to make pay­roll or buy that next auc­tion unit”?

The answer is cash flow.  And cash flow is king.

While your book­keep­er can show you your finan­cial state­ments, what you oper­ate your busi­ness on every day is cash flow.  Cash flow is the lifeblood of your busi­ness and cash flow is the fuel for your growth.  Sim­ply put, cash flow is the move­ment of mon­ey in and out of your com­pa­ny.

You’ve heard the term, “I was so suc­cess­ful sell­ing cars that I went out of busi­ness”.  Why does that hap­pen?  It hap­pens because every time you sell a car you are out of pock­et the mon­ey until you are paid by your customer’s lender — which can take weeks!  The more cars you sell, the more “cash flow” you need.

Think of it this way:  Let’s assume your aver­age cash in deal is $7,000 and you sell 8 vehi­cles per week.  Each week your cash flow needs are $56,000 ($7,000 x 8) just for inven­to­ry.  If your customer’s lenders don’t pay you for two weeks after the sale you need $112,000 in cash ($7,000 x 8 x 2) in your busi­ness just to cov­er your cars…..not to men­tion pay­roll and oth­er expens­es.

If you suc­cess­ful­ly grow your sales to 10 per week you will need $140,000 in cash ($7,000 x 10 x 2). That is anoth­er $28,000 for sell­ing two more cars per week.   This is why grow­ing your busi­ness takes mon­ey!

Floor plan­ning is the answer to this real issue and will pro­vide you the cash flow to grow your busi­ness and not have to stretch to make pay­roll or stretch to buy that next auc­tion unit.  Floor plan­ning pro­vides you the abil­i­ty to buy that next auc­tion unit and keep your lot full — full of cars and cus­tomers.

Keep your mon­ey – your cash flow – work­ing for you in your busi­ness and not sit­ting idly on your lot.   Take your busi­ness to the next lev­el by giv­ing your cus­tomers more vehi­cle choic­es to dri­ve more sales.

Floor plan­ning your inven­to­ry can improve your cash flow and help you grow your sales.

NextGear Cap­i­tal has the cut­ting-edge tech­nol­o­gy and indus­try-lead­ing cus­tomer ser­vice to empow­er deal­ers to floor plan vehi­cles from vir­tu­al­ly any­where, at any time. Be sure to con­tact us at NextGear Cap­i­tal for all your floor­plan­ning finan­cial needs!

 

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