Few things are as daunting as dealing with low cash flow in the first quarter of the new year. Use the following tips to help you handle the February cash flow crunch.
Get your invoices out before the holidays
Do what you can to keep your cashflow in check before the holidays by sending out any leftover invoices before the holidays and stick to your payment terms.Speed up your debt collection process
Chase up outstanding debt right away to stimulate your cash flow in the short term. In the long term, it can positively impact on your future cash flow.
Reduce your capital requirements
Keep your inventory small by ordering less stock more frequently. Invest in the stock that sells best at this time of the year and focus on those with a higher turnover and margin.
Speak to the tax man
If you're experiencing low cash flow and are faced with a huge BAS payment, speak to the Tax Office. They will happily work with you to secure an extension. Explain the efforts you have put in place to pay the debt off quickly and set aside 20-30% of your incoming payments for the next cycle so that you won't be caught off guard again.
Apply the lesson
Take what you learn to create a positive cash flow strategy for the future. The future of your business depends on how well you handle your cash flow. At the same time, you can alleviate plenty of stress, which will put you in a prime position to focus on your business' growth, rather than survival.
Understand your financing options
Financing companies can help you get over the holiday hump in no time. Get in touch today and we will see how we can help you.
It's that time of the year again - time to reflect on your victories and challenges of the year that's ending, and to consider how you want to do things differently in the new year to take your business to the next level. Here are some of our tried and true tips to help you succeed in 2017.
Setting Your Goal
Many small business owners have a financial goal for their companies, however, $10 million in turnover is not the true goal. True goals are fuelled by emotion. Your company, and the money you make from it merely provides a vehicle to achieve a certain outcome, which is usually very personal.
We are driven by pain and pleasure, and those are the two emotions that drive success. You either want to achieve a goal that will allow you to move towards or away from something.
What drives you? What drives your family? Sit down with your loved ones and discuss what is important to all of you. Put a dollar amount to that private goal, and you will have a starting point to work towards.
What are the values required to achieve your goals? You need to ensure that your staff complement shares the same values, and then you need to unlock their personal goals. Show them how your business can help them achieve those goals.
Redefine Job Descriptions
By creating detailed job descriptions with time percentage allocations, you can help them prioritise the most important tasks.
Create Measureable Targets
In most cases, SME businesses are not measureable. However, if you can't measure it, it is harder to manage it.
Improve Product Performance
You need to know the gross profit of each of the products you sell, so that you know which is the most profitable, and which products are poorer performers. This will enable you to expand on strong performers while phasing out the poor performers.
Unless you know the productivity rate of everyone in your company, you do not have a finger on the pulse of your business. Increased productivity leads to an immediate increase in profit.
Conversion rates will indicate how well your business is performing. The average business has a 35% conversion rate of prospects to leads, leads to quotes and quotes to sales. If your conversion rate is significantly higher than the average, it is possible that your price is too low. If your conversion rate is much lower than 35%, you should consider either dropping your price, or retaining the price and increasing productivity at the same time.
Create a Predictable Flow of Leads
By understanding your target market and adapting your business to the niche you have carved, you can secure your sales pipeline. Ensure that you understand your own value proposition, which aligns with clients' needs and market it accordingly.
Once you have figured out the strategic purpose of your business and created your unique value proposition, all that's left is for you to systemise your business. Look for the best ways to help clients find you and transition through your sales funnel, with the minimal amount of steps, effort, and time expenditure possible.
Finally, consider what your business will look like when you have reached your goal. When it can run successfully without you, you can start a brand new goal, following the same success formula.