How can your business overcome financial challenges?
21 Jun 2022
Being a business owner comes with a wide range of challenges but getting your finances in order is fundamental to ensuring your business’ survival.
Unfortunately, funding is not just an issue that is exclusively encountered when starting up a business.
With many business owners aspiring to build their empires, sourcing funding to sustain growth can be an ongoing battle.
As there are many different options when it comes to funding, recognising which course of action would work best for your circumstances can be challenging.
This will also differ based on the stage that your business is at, for instance when initially starting up your business, the funding issue will be centred around how to get the business off the ground.
Key considerations for a start-up include how much funding you require, along with whether you would like to personally finance the business (through savings or loans) or whether to bring in external investors.
As the business progresses, you may have goals to accelerate growth, which requires further considerations of how to fund this.
If the company is in a strong position, you may be able to use profits to expand its operations. However, if external funding is needed, it may be worth exploring available grants, or even crowdfunding.
Ensuring a healthy cash flow
Having a healthy cash flow is fundamental for a business to not only survive but to thrive.
Businesses should keep thorough records of their cash flow, along with well-prepared forecasts to prepare the business for fluctuating market conditions.
One, frustrating, circumstance that business owners should prepare for is late payments.
It is instrumental for businesses to have a strategy in place to discourage late payments, such as issuing reminders to clients before payments are due and giving a clear deadline.
Another option for clients that consistently pay late is to charge them in advance, or issue penalties for late payments – although this way risks jeopardising customer satisfaction.
Need advice on your business’ finances? Contact us.