![]() The mistake? The shop manager was his future father-in-law. And of the other three people in the shop, one was a good friend and the other was loyal to him. On top of that, I let him convince me to hire his fiancée as the Office Manager. So, of the 6 people in the company working full-time, 5 were connected and 3 were family. What I didn’t know was how to make parts. I partnered with a young man who had operational sheet metal experience and made him General Manager. He helped me buy a very small sheet metal shop. I’ll start from the beginning at RAPID. I can sell and I knew there was a market for prototype sheet metal. Usually I (and others) talk about how we got from here to there – what worked. However, in my journey there were lots of false starts, dead ends, ouches and plain old dumb mistakes. I have found there is often as much to learn (if not more) from mistakes as the wins. And while mistakes will happen, they can lead to breakthrough success. Sweep Accounts Definition: Types and How They Work #banks #sweepaccount #cashmanagement #machining #sheetmetal If your bank isn't paying you around 4.5% interest on your deposits, ask them if they offer sweep accounts. In short, the cash is 100% protected with no limits. These funds buy short-term bonds from the federal government, called Treasury Bills, which are safe investments. Sweep accounts are great because they spread your money across different banks or invest it in government Money Market funds. This meant we had more than the FDIC-insured amount of $250,000 in the bank, but I felt comfortable taking that risk. Here's how I managed our cash: I always made sure we had 1.5 times our weekly payroll amount in cash, in our regular accounts, and the rest went into the sweep account. Right now, that interest rate is around 4.5%! A sweep account automatically moves any extra money into an investment option that earns higher interest. For safety (asset protection) and to earn more interest, we put most of our cash in a special account called a sweep account. Towards the end, we always had a lot of money in the bank. ![]() It took some time to achieve this, but once we did, we stuck to it, even as our business grew by 32% on average each year. At RAPID, we had a month’s revenue in cash in the bank with roughly another month’s revenue out as receivables. Running a Shop can be stressful but having a good cash management strategy can help you sleep better at night.
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