One of the main reasons businesses fail so early (amongst 50% within the first 3 years) is poor business finances. Being unable to keep on top of your finances as a small business owner can be your downfall, and the collapse can happen quickly. You need to be aware of your income and expenditures and budget correctly to enable you to support the business as it needs to be supported and ensure you are well placed for the future.
This post sleeves into some ways you can improve your business and help you on the road to success.
Talk To A Professional
Before you or anything else, you need to get advice from a professional. Bring an Accountancy firm on board, talk to a business advisor or mentor and ensure you are getting the right direction to help you get from where you are now to a healthier financial future for your business.
Next, you need to look at where your money is going and determine if you should be spending it there or if it can be better used elsewhere. Can you switch to cheaper utility suppliers, for example, or can you swap vendors or negotiate better deals to help you reduce costs this way? Go over everything with a fine-toothed comb and assess the cost and benefits of each factor. It gives you a better insight into how your money is being spent and whether or not this is vital for you to do what you do.
Shift Slow-Selling Inventory
If you are holding physical stock that isn't shifting, one idea is to offer markdowns or offers on them to help you generate more money and free up warehouse space at the time to allow you to bring in products that do sell. This can be the same for the services you offer. If you find there isn't much takeup on the service, instead of putting time and effort into providing it, why not quietly remove it or rebrand it into a different service? You need to cut the fat from your offerings to avoid wasted money and drains on your finances. So assess what you are doing and look for any weak spots you can eliminate to help you improve your cash flow and get into the black.
What type of debt is your business holding, and can you work to reduce it at all? Consolidating debts can allow you to take advantage of different credit offers and pay off all of your existing debts with the funds. However, this can sometimes lead to increased interest and higher debt levels if you don't have exemplary credit. For some businesses, it can be better to focus on paying down debts and working out payment plans with creditors to help you shift debts and reduce strain on your business finances.
Be responsible when it comes to dealing with business finances, and ensure you have a handle on everything. If you aren't paying close attention to your business finances, chances are you'll be in trouble sooner rather than later. If you feel you need to get help, talk to experts in your field and finance professionals to help you overhaul your finances and get your business out of the red.
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Author - chris
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