Tips to Handle Cashflow Offender in Jewelry Business

Running out of cash is undoubtedly the biggest killer in a jewelry business. It takes years for jewelry business owners to get familiar with proper cash flow management. Below are some top tips to stay flush in business and never get chomped for cash.

Impulse spending

Impulse spending strangles your budget. As Jewelers, you are inclined to be attracted towards pretty things but don’t lose sanity. It means, buy the pink pearl pendant necklace if it is in demand, otherwise don’t.

Ignoring the budget

Use budget for better money control. Be flexible and change your daily budget according to the amount of sales and some pearls were costly than budgeted for. Budgets is not restrictive but is liberating the moment you sort your income and cover your debts and expenses much better.


Credit card always fools you. At times, you purchase beyond limit and end up not paying the monthly credit card in full. If you could pay it last month then you will not be able to pay the expenses this month together.

Soon, you will be paying for purchases done 18 months ago, saddled with interest and new expenses continuance. Use the debt snowball technique, for example – suppose you have 4 debts:

  1. $500 – Vendor bill – $250
  2. $2,500 – Credit card debt – $200
  3. $7,000 – Insurance – $135
  4. $10,000 – Bank loan – $96

Make minimum payments on every debt. The vendor bill will be gone in a couple of months. This frees the $250, which can attack credit card debt and you start paying $450. In five months, you will say goodbye to credit card debt!

Forward that freed up money of $450 to the insurance payment delays to increase $585 a month. In a year, it will vanish. The moment you reach your biggest debt – bank loan, you can put $681 a month towards it. This will last for not more than one year. In this way, you can kick the debt of $20,000 in less than three years.

Duration between received income owed and payment due

The duration between receiving your payments from customers and making due payments can be hard to handle. It is risky to depend on your credit line instead of dipping in the savings. You can put both back but is it worth paying credit interest due to desperation or poor planning.

To remove this duration risk on cash flow use budget including all possible upcoming expenses. In this way, you get an idea what is needed every day and week to cover recurring expenses and single time payables.

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