By asking the right questions and we hear the words “Cash Flow Challenges” we can quickly make the small business owner understand that we know what they are going through. We have a basic formula that we use to get an additional 61.75% extra profit, that’s right 61.75%! Increase sales by 5%, decrease your input costs by 5% and reduce your overheads by 5%. There are various techniques to achieve these. Call us to to find out more.
Sales are critical
We have found that one of the main reasons businesses suffer cash flow problems is their lack of sales. Sales is the most important aspect of any business. Without sales no business can exist, unless you are a large Lotto or inheritance recipient. Even then, it won’t take long to experience a negative business sentiment. We have an effective and guaranteed marketing programme that can help turn your business around in a short period of time. The marketing programme will assist in setting out a marketing plan to lift sales and profits. Let us help you pay the rent!
Curbing costs
Another aspect of business issues that we can assist with is cost reduction. By implementing some simple cost reduction, overhead reduction and recruitment systems we can sometimes quickly turn a small business around and produce large amounts of hidden cash and/or stop wastage. We have several effective and guaranteed cost reduction programmes available to assist business owners lower their costs and raise profit levels. We will help identify and repair all those little “leaks” that keep businesses poor. Research has found that the average business loses between $100 and $300 a day. Do you want to reduce these leaks?
Future planning
The savings can then be used to spend on, for example, marketing which would produce the extra clients, sales and leads that will make the business bottom line grow. Through an effective business plan the additional profits from the above strategies can be used to acquire capital equipment for more business efficiencies and productivity. We can assist in developing a business plan for future growth. Did you know that for every $1,000,000 in turnover you are leaking around $75,000 in profit before tax. If this is upsetting then give us a call to discuss how to resolve it.
Business systems
If we find a business that has genuine cash flow problems it will probably mean either poor stock control management or worse bad credit control and these days there can be no excuse for that. There are a several solutions to the stock control situation and sometimes it can be as simple as running a “warehouse clearance sale” to liquidate the over held stock other times or it can just be the implementation of a proper purchasing and stock control system. Business systems are required in every facet of a business. These systems ensure that information about each of these facets are reported to the business owners who, in turn, can make policy changes to the business if and when necessary. With these systems you can identify the fortune that lies hidden in your business.
Credit controls
The solution for bad credit control is to implement proper credit control systems and explain to business owners that customers will generally not leave them just because they chase up what is rightfully theirs.
9 tips on how to better manage cash flow
- Make sending out invoices a top priority
- Send your invoice to the person who authorises the payments
- Provide information on the invoice on how payments can be made by direct deposit
- Include due dates on all your invoices
- Cut the grace period for late payments and increase the frequency of reminders
- Pay your suppliers as their invoices come in and avoid the trap of paying all suppliers on the same day
- Continually refine the accuracy of your sales and income forecasts
- Closely monitor stock levels so that your stock holding never exceeds your projected needs in any purchase period
- Don’t let old stock take up space, liquidate it and move the resulting cash to quicker moving more profitable lines.
Call us now for a one hour Entrepreneurial Alchemy consultation and see how we can help your cash flow challenges.
