When it comes to insolvency, prevention is always better than cure, so what can you do to prevent insolvency from...
There’s never a bad time for a business health check. Taking a snapshot of how your business has performed against your goals, setting new objectives and planning how you’ll achieve them.
The start of a New Year is a perfect time to look again at how you’ve done over a 12 month period, consider what you did right, what you could improve on and how to achieve what you want to achieve in 2019. Keeping your business health under review is essential to making sure you remain profitable and avoid the need for engaging an Insolvency Practitioner.
A business health check starts with cashflow
Cash is the lifeblood of your business. The basic problem with supplying goods and services on credit is that suppliers, employees, and overheads often have to be paid before the money from the sales has been received. A good cashflow forecast is essential for helping you to deal with these timing differences. It helps you predict when cash will be short so that plans can be made about how to deal with the shortfall which may mean seeking extended terms with your suppliers or looking for alternative sources of working capital.
Your business plan and business health check
Once you’ve assessed the past performance of your cashflow, you can use this to help you set a business plan for the coming year. You should always have a good idea about where your current financial position. It is also good to have a plan for the future. You should put together a strategy that covers your targets, how these are to be achieved and what the effect on your finances will be. The plan should also include aSWOT analysis – strength, weaknesses, opportunities, and threats.
Use a business health check to start 2019 the right way
Business finances can change over time and one way to maintain control over them is to conduct a business health check once in a while and from there keep your cashflow and business plan under constant review.
If things go right, you’ll be able to see how well you’re performing and if things go wrong you will be able to take action long before a problem becomes a crisis.
Should your cashflow become a concern, you can then seek help early. Did you know that an Insolvency Practitioner can help you avoid insolvency?
As Licensed Insolvency Practitioners, we’re accustomed to helping businesses and individuals in all stages of financial difficulty. This gives us insight into how businesses get into trouble and,crucially, how this can be avoided or recovered from. We offer a free consultation which you can take advantage of to find out how we can use this wealth of experience to help your business start 2019 the right way.
Speak to us, we can help.