It’s essential you know how much money you need to bringin every week to cover costs.
- Keep track of sales daily
- Adapt quickly to unexpected changes
- Keep on top of your running costs
- Make sure you can deal with sudden increases or exceptional costs.
It’s useful to forecast when money is coming in and to know when payments are going out. Your cashflow forecasts will show you if you have enough cash to meet your obligations.
Good businesses keep enough cash on reserve (or have guaranteed future orders) to cover all their costs for at least three months. Can you cover three months of running costs?
It’s vital to get paid on time, every time. Do your systems make sure your customers pay on time?
It’s important to keep track of the money you owe to other people to make sure you don’t end up with debts that you can’t afford to repay.
While it’s hard to predict what might happen in the future, you need to think ahead. Try to be aware of things like when loans are due, when equipment may need to be replaced or any other situation that could lead to a large amount of expenditure.
While it’s important to generate sales, you have to make sure you’re making a profit on every sale – or, at least, be able to explain why some items are sold at an unprofitable price point.
When you run a business, it’s easy to get caught up in all the day-to-day tasks. But it’s also important to check every aspect of your business to make sure you don’t suddenly encounter unexpected problems.
In order to beat the impact of inflation on your profits, you also have to increase the value of your sales and contain running costs.
Good advisors can make a big difference to your business. When you are surrounded by experts you can trust, it’s easier to make the difficult decisions that can be the difference between success and failure. Do you work closely with your advisors?
