Unless you’re operating in the financial services sector, it’s unlikely you got into business for the thrills of money management. Yet whatever your company produces, delivers, or is passionate about, it’s ultimately your finances that will keep you going.
The past year has been tough for almost all industries, but recent analysis suggests the UK’s post-Covid economic recovery will be stronger than first thought. So to help you come out the other side in good health, read six quick tips for improving your business’ finances below.
Have a financial plan
Having a clear business plan that incorporates financial forecasting and planning is essential. Your projections should ideally be based on historical revenue and expenses as well as current market and economic trends.
If you don’t have historical data to rely on, consult industry experts to get a better idea of what to expect in a typical year.
Balance ambition with realism
Positivity is key to making any business a success. You have to believe in the validity of what you’re doing – just try to temper it with realism when managing the financial side of things
That could mean taking precautionary measures such as forecasting worst-case scenarios and building up cash reserves in case of emergency.
Manage your cash flow
Cash is the lifeblood of every business. It’s vital for paying bills and staff wages as well as investing in growth opportunities, so monitor your cash flow on a regular basis to understand when you will or won’t have cash available.
Paying close attention will allow you to plan for shortfalls and take action by increasing income, reducing expenses, or various other measures.
Get paid as quickly as possible
Long payment periods often cause serious problems for businesses without large cash reserves. Taking on jobs can require various types of investment upfront – and chasing payment will get this money back into the business quicker.
Take steps to negotiate shorter payment periods with key customers and make sure to send invoices out promptly and in a clear format.
Ask for outside help
Turning to experts is a smart way to diagnose and fix financial problems that you’re struggling to spot. That could involve picking the brains of business owners in your professional network or reaching out to financial management professionals.
Whether it’s accounting, tax, or investment advice you’re looking for, an outside perspective could be exactly what your business needs.
Don’t be afraid of finance
On a similar note, no business owner should be afraid to take on various types of loans or other financial products when it makes sense to do so. They can often provide a necessary boost of capital to facilitate growth, whether that’s expanding or upgrading your premises, or buying extra stock.
From secured and unsecured loans to cash advances, there is a wide range of options out there to suit different businesses.
Are you on top of your business’ finances? Follow the tips above to improve your outlook for the months and years ahead.