5 tips to safeguard the cash flow of your Mount Gambier business
MOUNT GAMBIER SMALL and MEDIUM BUSINESS OWNERS – hands up if cash flow is something that keeps you awake at night?
You’re not alone.
Global research shows that as much as 80% of small and medium business owners have sleepless nights pondering cash flow issues.
That’s because cash flow – the stream of money in and out of your business – is your company’s lifeblood. It can make or break your business.
To ensure you can sleep easier, we’ve collated five tips on how you can ensure your cash flow sustains your business, rather than strangles it.
1. Build a cash reserve
Cash flow is the lifeblood of any business. To ensure that it makes, not breaks, your business, it’s important to build a robust cash reserve.
A reserve of cash can help you meet your financial obligations in difficult times and allow you to take on opportunities to grow your business.
2. Separate business and personal money
To some people, this might sound obvious. But those people would be shocked by how often we see the streams of business and personal money all flowing into one river.
By keeping business and personal expenses separate, you may better understand your business’s cash position.
It may also ensure that you don’t use money meant for your business on personal expenses; you aren’t raiding your business funds to go on a family holiday, for example, or using funds that should be going to your mortgage to pay your business expenses.
3. Get paid on time
If you want to improve your cash flow, you are going to need to have a talk about money.
Specifically the money that’s owed to you, and not being paid.
If your business doesn’t actively chase up unpaid invoices, it’s time to get in the habit.
A strategy for getting paid what you are due can address tactics to encourage prompt payment – maybe it is a discount to early payers? Or you need to make your payment terms more clear?
We know this is a job that a lot of business owners would prefer to avoid, but, to put it simply, you can’t afford to not do it. Literally.
4. Control business costs
Now we are getting somewhere!
You can’t control what you don’t know. So it’s time to look at your business expenses so you can analyse where there is a chance to cut costs, without compromising your growth, or what you offer your customers or clients.
Regularly checking the costs your business has to pay will provide you with the information you need to objectively monitor what you are paying out.
It might also show that it’s time to ask some of your suppliers to sharpen their pencils.
5. Protect your business
You may be able to help ensure your business can meet its running costs if you or a key employee is unable to work due to illness or trauma. This can be done by taking out business expenses insurance and key person insurance. Both insurance plans provide a monthly benefit if you or a key person in your business become incapacitated.
We can help you find an insurance plan that suits your business and your circumstances – talk to your Business Advisor about how we can protect what you’ve built.
Work with a professional
Surely you’ve heard the saying, ‘if you think it’s expensive working with a professional, try working with an amateur’?
It’s an oldie, but a goodie. Because it’s true.
Sinclair Wilson’s business is businesses – ensuring that businesses have the systems and resources to succeed is what we do, every day.
Getting help from someone who knows how to make your business work – and how to ensure it is secure, successful and well-protected simply makes good business sense.
Get in touch with us today to find out more about how we can help ensure your business thrives.