Trying to budget is a lot like exercising – while we all know that we should do it, avoiding it and being a slob seems a heck of a lot easier. And when we get round to it every once in a while, the strain really shows.
But if you’re running a business, you can’t afford to pull a financial muscle, lest you descend into a spiral of debt. Yet, according to Bloomberg, 8 out of 10 businesses fail within the first 18 months of opening their doors – and poor financing is largely to blame.
So, if you’re trying to make the most of your finances, what do you need to do to avoid pulling a monetary muscle?
Know Your Alternatives
While larger banks might not be willing to trust an ailing company, you could turn to the numerous alternative finance companies that focus on your niche sector.
Factoring companies, construction finance, crowdfunding, equity crowdfunding and many more are available to the business in need of cash – and they’re becoming more successful by the year, raising billions for SMEs.
The best of these businesses will cater to your specific market and, like a bellowing personal trainer, help get your finances in check.
Find a Finance Aficionado
If you find that financial jargon flies over your head like a soaring decimal point, then it’s time to get an accountant in on the act.
With an effective accountant, your finances will be in a much healthier state, leading to fewer errors that might pique the tax man’s interest. More than this, your accountant can act as a suitable sounding board to help you make the right choices for your business.
Know When to Push Yourself – and When to Hold Back
If you’re out for a jog and feel your muscles atrophying, you don’t start sprinting in the hope your muscles won’t tear. Instead, you pull back a little, allow yourself to settle into your pacing.
A load of businesses are intent on pushing their finances beyond the pale, too excitable to hold back and check if their decisions are actually viable.
Before you’ve made any rash decisions, create a business plan that will forecast your projected earnings and losses. If expansion is realistic after that, then plough on ahead. If not, give it time. After all, responsible spending will let you turtle your way to success, rather than the inevitable loser of the hare.
Know Your Customers – and Treat Them Well
Your customers are the source of your profits, and you’ve got to know exactly what they want. Finance magazine Forbes claims that one major reason most businesses fold within 18 months is that they fail to set up a rapport with clients.
For that regular injection of profit, cater exactly to your customers’ needs. You’ll see them return in no time.