REVIEW YOUR FINANCIAL POSITION
Businesses often fail because of poor financial management or a lack of planning. Often the business plan that was used to help raise finance is put on a shelf to gather dust.
When it comes to your business’ success, therefore, developing and implementing sound financial and management systems (or paying someone to do it for you) is vital.
Updating your original business plan is a good place to start.
When reviewing your finances, you might want to consider the following:
Cash flow – this is the balance of all of the money flowing in and out of your business. Make sure that your forecast is regularly reviewed and updated.
Working capital – have your requirements changed? If so, explain the reasons for any movement. Compare this to the industry norm. If necessary, take steps to source additional capital.
Cost base – keep your costs under constant review. Make sure that your costs are covered in your sale price – but don’t expect your customers to pay for any business inefficiencies.
Borrowing – what is the position of any lines of credit or loans? Are there more appropriate or cheaper forms of finance you could use?
Growth – do you have plans in place to adapt your financing to accommodate your business’ changing needs and growth?