6 Action Points for Improving Your Small Business Finances
If you’re running a business of any size and in any sector then there is never a bad time to focus on areas of potential improvement… but the New Year is certainly as good a time as any.
So, as January approaches again and we wrack our brains for resolutions, here are six top tips for finding new ways to make your business better.
1 – Set the right goals
The goals you set for your business can go a long way towards defining the progress you’re able to make over a period of time, whether long or short. So it’s very important to make sure that you set the right targets and look to strike the best balance between ambition and pragmatism.
2 – Work on your strengths
It makes good sense for businesses and their bosses to worry and to focus a lot of attention on their weaknesses and on trying to overcome any problems they are causing. But it is vitally important as well to work hard on the strengths of your business to improve its prospects and to guard against complacency in any aspect.
3 – Speed up your invoicing processes
It is easy to overlook the importance of invoicing quickly and generally ensuring that your payment processes are as efficient as they possibly can be. Understandably, small businesses will often be more focussed on generating sales and pursuing leads but without a smooth and speedy invoicing system, cash flow issues can quickly arise and cause serious financial headaches in the process.
4 – Map out your financial plan
Few people, aside perhaps from accountants, really relish the idea of spending time buried in the numbers and the financial side of operating a small business but doing so can really pay off. Specifically, as the New Year approaches, creating a clear and comprehensive financial plan can be a big advantage and a valuable reference point for progress made on a monthly and quarterly basis. Understanding where your cash flow can be tightened up by a small tweak here and a slight change there can reap rewards further down the line.
5 – Don’t over-borrow
Avoiding the temptation to over-borrow or to over-commit in any financial sense can be the difference between sustainability and disaster for many small businesses. Whatever sector you’re in and whatever ambitions you might have for your company, it is prudent only to borrow what money you need to make progress and not whatever amounts are available to you at a given time.
6 – Never stop learning
Whether you are an experienced business owner who has been running your own firm for years or you are new to the world of entrepreneurial endeavour, it is equally important to keep learning in any way that you can. Even if you feel totally confident in your own judgement and processes as a business operator, it always helps to find new ways of learning from your colleagues, your employees, your competitors and from whatever life has to throw at you.
As we all know, cash flow is the lifeblood of any small business, so keeping a close eye on the finer details generally gives your business the best chance of being successful and sustainable. And even if 2015 turns out to be a tough year, following the above tips should help ensure you’re prepared for whatever comes your way.
Keith Tully from Real Business Rescue is a leading corporate insolvency specialist. He knows what it takes to keep struggling businesses afloat and what qualities are required of company directors.