Top tips for your business this new year, use this chance to grow your business, don't repeat mistakes and take...
New Year, New You! Every year we make New Years resolutions to improve ourselves and we take time to check our health and lifestyle. When looking at your personal health and finances, why not improve your business health and finances. New Year is a great time to do a business Health Check and see how profitable you are. During every day business life you are sometimes too close to your business to see if it has slipped or if you need to change processes to keep up with competition. Businesses grow from small to medium sized very quickly before having time to change processes, therefore some of the processes you have in place since you were a small business or sole trader are not working effectively as a larger company. This is a common problem in many businesses which can be easily rectified and often just stepping back to give you businesses a health check can identify any areas where you are underperforming. By doing a health check on your business you can identify early if you are heading into trouble financially.
4 steps to getting your business in good health
- Control your finances – you need to have a good idea of your cash flow forecast, outgoings and overheads as well as any debts. Compare this to previous years, if your incoming cash is going down but your overheads are going up you need to change things, and quickly to remain solvent.
- Review Cash flow regularly and Often – Directors should review cashflow, debtor status, liquidity, inventory levels and overheads on a regular basis. Be precise and make sure that nothing is overlooked, also be realistic with your cash flow forecast, money can only be counted on if it is in the bank .
- Be realistic – don’t put your head in the sand if things are slow or underperforming, you need to admit if things are not going to plan and react quickly.
- Get help early – Businesses running into trouble can be seen early as long as directors admit this. Many Directors are too close to the problem or have gotten themselves in a sense of complacency over things. You need to realise that getting Insolvency advice early is not a last resort but often a fist step in business recovery.
Lines Henry offer free initial advice, so if you want external consultation on your business and your financial situation we can help prevent your business from going into liquidation.