This is a subscriber-only article. Join Entrepreneur+ today for access

Learn More

Already have an account?

Sign in
Entrepreneur Plus - Short White
For Subscribers

Money to Burn? Before you go on a spending spree with your surplus cash, get your priorities straight.

By C.J. Prince

Opinions expressed by Entrepreneur contributors are their own.

Given that most businesses have been in hunker-and-save mode forthe past few years, "find ways to spend excess cash"probably ranked last on the average entrepreneur's to-do list.But with things looking up, business owners may find themselvessurprised by a surplus in their company's coffers. It may notbe millions, but it could be a sizable enough wad to burn a hole inthe company's pocket.

The key to smart spending and investing is to be neither overlycautious by leaving it all in a low-interest-bearing money marketaccount, nor overly optimistic by rushing to staff up or buy a newfacility before you know how far you can stretch the moneyyou're left with.

First, sit down with your CFO and accountant to do some seriousprojections. Look at the operating cycle of your business and howmuch cash you're expected to turn under normal circumstances,advises Ira Rosenbloom, CPA and managing director of Mintz Rosenfeld& Co., a Fairfield, New Jersey, accounting firmspecializing in small-business finance. Make sure the extra moneyreally is excess and not a one-time bump from an unusual sale orsavings from a one-time cost cut.

The rest of this article is locked.

Join Entrepreneur+ today for access.

Subscribe Now

Already have an account? Sign In