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April 27, 2016
Maria Pesin

It is vital to save money for a rainy day…especially in the fashion business.  There are so many peaks and valleys in our industry.  The very nature of our business creates issues with cash flow.  However, what I am talking about is different.  What I am discussing are those times when your business comes up against unusual problems.  Maybe business is slow because the stock market is down.  Or a shipment came in damaged and you can’t ship it, reducing sales.  It could be your line wasn’t particularly well received that season.  These are issues outside of typical cash flow.  I have seen businesses killed by not being prepared for these unexpected difficulties.
The saying “save your money for a rainy day” comes from an Italian comedy, La Spiritata by the Florentine playwright, A. F. Grazzini and written in 1561. The idea its to keep a cash cushion so your business can survive disaster.  I’m not speaking about a few extra dollars but something substantial to cover expenses during lean months.
It’s very easy to think that things will last when business is flush.  I lived through the 80’s when customers abounded and we thought the good times would never end.  Many a fashion brand closed their doors following the crash of ’87 and even more in the Great Recession in the 2000’s.  That is why you need to be able to ride out a bump in the road.
Obviously the big reason to have money for a rainy day is so you don’t go out of business.  Another good reason is sometimes you need to course correct your strategy in order to get your business back on track.  The worst position to be in is when you cannot do the things you know you need to do because you can’t afford to.
So think about the lesson you learned from your Mom and Dad and save money for a rainy day.

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Maria Pesin

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