The end of the year is fast approaching, and now is a great time to start to think about how you can make 2019 your best business year yet. Difficult economic conditions are bound to arise throughout the year ahead that can create cashflow challenges for your business. We have put together a nine-point checklist that outlines strategies that you and your business can incorporate to assist with growth and success in the New Year.
1. Restore your vision of success
The start of a fresh year should be used as an opportunity to take a close look at your business as it stands and ask the following questions – where are the prospects for growth? What improvements can be made going forward? Explore ways to optimise your current business, or look to create new products or services for your current customers. Identify solid goals and objectives that will help guide your business throughout the year ahead.
2. Get your administration in check
Now is the perfect time to get organised and on top of your administration before the year slips away. Creating a filing system for paperwork and invoices can take the headache out of credit management. Make sure to dispose of outdated paperwork and stay on top of sales ledger entries, credit notes and adjustments to prevent cash flow problems from occurring and ensure that your business is capable of achieving growth.
3. Enhance your customer relationships
Maintaining a close relationship with your customers will help establish a reliable source of sales revenue and minimise issues with repayments throughout the year ahead. Keep an open level of communication between your business and its customers to ensure that you continue to improve customer service standards.
4. Don’t neglect credit-checks
While it can be exciting in the current business environment to receive a new business prospect, it is important to ensure you carry out credit checks on new customers. Credit checks can be done quickly and relatively inexpensively, and will allow you to identify trends in a customer’s repayment behaviour and avoid any payment issues in the future. Circumstances affecting existing customers are constantly changing, so it is also worth regularly reviewing their status.
5. Ensure invoices are issued promptly
To maintain a healthy business cashflow in the year ahead, it is vital that invoices are issued in a timely and consistent manner. Research has shown that half of Australia’s SMEs are experiencing delays compared to a year ago, therefore invoices that are issued early and are diligently followed up will allow your debtors plenty of notice to pay their receivables, which in turn will improve your cashflow.
6. Keep your competitors close
Keeping track of who your competitors are and what products and services they offer will give you the power to stand out in the crowd. Do your research and keep on top of news and developments within your industry. Take note of any new trends. This knowledge will give you exactly what you need to refine your competitive advantage and achieve growth for your business.
7. Get the most out of your suppliers
Now is a good time to assess your current suppliers and ensure that you are getting maximum value for your money in the market. Research and compare rates and prices from other supplies to ensure that you are minimising your operating expenses. Take particular note of any special deals or discounts on offer and try to negotiate longer credit terms. However, don’t forget that a loyal supplier may prove to be very useful when times get tough, so don’t forget the importance of establishing and maintaining close relationships.
8. Give debtor finance a go
Cashflow is an essential indicator of the health of your business. Sticking to cashflow budgets and ensuring invoices are paid in a timely fashion is paramount. If your cashflow is limiting your working capital, now might be the right time to look into alternative forms of financing. Debtor finance providers can pay up to 80% of outstanding invoices usually within 24 hours and also follow up your debtors for you, helping to take control of your cashflow and boost your working capital.
9. Take time to relax and celebrate your achievements
It’s no secret that running a small business can be stressful, and there are many challenges faced across the way. Be sure to take time out of your busy schedule in the year ahead to enjoy and reflect on your successes, as surviving in the current economy is a sign of success in itself. Take a well-earned break to renew your energy and focus for the year ahead. Don’t forget that your employees too are most productive when they feel valued and acknowledged, so reward your team for achieving their objectives with inexpensive staff events during the course of the year.