Is your business going to be swallowed by economic uncertainty???

Given that businesses are experiencing low confidence levels with reduced consumer spending, now is a good opportunity to examine business costs and give your business a financial health check.  When there is an abundance of doom and gloom, your business’ financial fitness will be one of its biggest assets.
It’s a management challenge to survive the hard times, so here are a few tips to help you: -
Costs: Controlling costs becomes imperative.  Identify the ones that are larger than the others.  Why are they so large? Compile a list and look at how they can be reduced.  Are they really contributing to sales?  Don’t let them gobble up your profits.  If you are finding it too easy to justify those costs or you simply can’t cut them; get some impartial help.
Income: Who’s your most profitable customer?  Your biggest customer is not always your best one. Try ranking your customers according to their net contribution to profitability. How do they stand on a fully-costed basis? By doing this you will get an accurate assessment of exactly who are your best customers. If it turns out your biggest customer is your best customer, it will highlight the sort of service profile, and cost profile, that generates a great customer.  The same goes for any of your products, crops or cows: are they making you money or sending you broke?

Debtors (customers that owe you money): The best payment terms are those that occur at the same time as your outgoings. If a “best” customer gets into financial trouble owing you three months of invoices, the impact can be harsh. It pays to keep them at a sensible level, even if it means offering them some concessions.  Matching receipt of income with payment of expenses (deferred terms etc) has a dramatic positive effect upon cash flow. Are you carrying customers? Are they ignoring your terms, always behind and making you chase them?  Stress-test your receivables and you may be shocked to learn what some customers cost.
Financing: Using the wrong finance facilities can be costly; you could be paying thousands more per year than you should.  Test the health of your finance facilities: ask your bank manager for an interest rate review or use a finance broker to find a better deal.  There is nothing worse than over-paying for debt; in fact it is simply unnecessary. And check that the split between long term and short term finance is optimum for you needs and you cash flow.
Business protection: Insurance, we all hate it, but it is a necessary evil. You need to be honest about how much insurance is required, and commit to properly covering yourself and your business. We recommend using an insurance broker as business insurances are highly customised for different industries. Remember the “fine print” can make or break your claim as was discovered after the Queensland floods, so make sure you understand what you are actually covered for and correct the policy if needed.
You: Most business owners try to do it all but the best ones know their strengths and weaknesses and use their resources to make sure their business is performing at its best. Involve, engage and lead your staff to build a better business. You need to be able to either see the fruits of your labour in your salary or in the increased worth of the business. Either way, be honest about how your business is performing and then do something about it.
We can provide all the tools and necessary knowledge for you to build a better business.