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Top Business Tips

In the current economic downturn business has been profoundly effected, particularly on cash flow and profitability.  Will your business survive?  Complexity does not always bring the solution. with simple tasks like cash flow forecasts, up to date books careful analysis and budgeting are necessary to proper management.

Cash is your most important resource, do not think that short-term finance will get you out of a spot as we all know that finance is getting harder to come by.

Our top business tips are;

1.  Stand back

and look to manage your risk.

Understand costomers and their buying habits, and how they have changed.  Review your position from your financial statements, including daily takings, cash balances and level of stock.  Don't just do what you always have - you need to review your operations, which may include an external consultant.

2.  Manage your finances

No cash will generally mean no business.  There is an old adage - Cash Is King - and this is true now more than ever.  Prepare and moinitor your cash flow, on a daily basis if necessary.  Take full advantage of terms offered by your suppliers.  If you are having a sale remember that you still need to turn a profit - it is no good making heaps of sales but not profitable ones.

3.  Improve cash position and profit

Control your expenditure by making sure that what you spend is essential and that when you spend you do it in the right areas.  Maintain stock levels as low as possible, and eliminate slow moving or obselete stock.  Become a debtors champion, making sure thse that owe you money pay when they should not when they think it is time.  Look for high margin sales, these are the ones you really want.

4.  Trade on your terms

If you trade on 7 or 14 day terms, enforce them, as otherwise a customer is making use of your money.  Are you a business or a bank?  Remember that a sale is not a sale until the cash is in the bank.

5.  Involve your bank manager

Don't think of your bank manager as just the guy that is there when you need a loan.  Get them involved in your operations as they are seeing many different businesses all the time and can often have a tip or insight from being outside the business.  Also, in tough times keep them abreast of problems that you have or can foresee with meeting committments.

6.  Staffing

Review the number and structure of your staff.  You may in fact need to put on someone else to allow you to work on the business rather than in it, to ensure not just survival but strength.

7.  Protect what you have

See you accountant or business advisor, or even your solicitor, to make sure that you have the right structure in place to protect your poersonal asets in the case of action or business failure.  You have worked hard to build up your personal asset base, so don't risk it being eroded by claims against you.

Acknowledgement:  IN THE BLACK, CPA Australia