10 FINANCIAL TIPS FOR SECURE BUSINESS GROWTH

 Statistics show that 70% of businesses fail due to poor financial management! It is the top reason for business failure. When starting any business or freelance working it is important to build sound foundations for the business. Top of the list should therefore be financial management.

The problem is that many people do not, early on in starting a business, take a serious inventory of their personal and team strengths and limitations. Without this, a lack of financial management experience or skills is often overlooked and the need for training or bringing the skills into the business may be missed.

Business expansion can be just as a risky a period as start up where financial management is concerned. Keeping a firm hand on the cashflow is crucial for both start-up and expansion.

So here are 10 tips to help you build a strong financial platform for your business:

1.      Get the training you need to improve your financial management skills. If you head the business and have someone else managing your finances it is wise to understand what they do so that you can at least monitor the finances and profit margins.

2.      Find a financial mentor to teach you the ropes. Make sure they are experienced financial managers and that you trust them with your business information.

3.      Set up a bank account at a different bank to your personal account. This gives you more flexibility and options if things are financially tight in the business.

4.      Develop sound cashflow projections and profit and loss for your business based on sound financial information from research of your product, service and market.

5.      Review your cashflow projections weekly to ensure you are on track with your sales, marketing and expenditure.

6.      Create a remedial action plan where you are not meeting the targets of your cashflow projection by increasing your sales action and reducing costs.

7.      Keep on top of your accounts. Do them routinely every month so that you have accurate records to assess against your cash-flow projections.

8.      Keep a monthly track of your profit margins especially when you are expanding or taking on staff. Without realising it your profit margin can be lost even when turnover is high.

9.      Set up a savings account and put 20% (40% if you are VAT registered) of all income into it every month. Do not consider this as spendable income. This makes sure you have money on hand to pay the Tax and VAT and you will earn interest on it.

10.  Instead of a savings account, if you like a bit of a flutter without the risk of losing your savings, then invest in premium bonds. I averaged a 6% return on my premium bonds when I used to do this!