New year, new cashflow
Most of us relish the year ahead, thinking how we’ll change things for the better.
But once we’re back in the office instead of on the beach or checking out the accounts payable rather than the cricket scores, our new year resolutions might seem like impossible delusions.
‘There are some simple ways to ensure that 2015 doesn’t become the year of the cashflow woes,’ said David Henderson, founder of CashMaxforecaster.com and CEO of accountancy group ROCG.
‘A little extra advance planning though can mean the difference between boom or bust,’ he said.
1. Smooth out the season
The festive season can be a sizzling sales sensation for some SMEs and a farcical fizzer for others.
If you’re currently riding high in bonanza territory, stash some cash for those moments when your business is more lonesome cowboy than John Wayne.
If you’re in a financial hole, pole-vault out of it and leap to put in place a January resolution to boost cash assets to get a jump on the year.
If you’re currently riding high in bonanza territory, stash some cash for when your business is more lonesome cowboy than John Wayne. If you’re in a financial hole, pole-vault out and make a January resolution to boost cash assets.
2. Push for upfront payments
Map when your clients might take a little longer than usual to pay.
At Easter, and of course Christmas, push for upfront payments so your business isn’t put on hold while the bunnies and reindeers are busy doing their thing.
Overdue invoice? Late delivery? A quick phone call can often resolve things more quickly and effectively. Leave the streaming to Netflix, not endless emails.
Asking for accounts to be fully or partly settled in advance can also help identify problem payers as well as uncover the accounts champions of 2015.
3. Think ‘Christmas’ all year round
Growing your customer base is a sure-fire way of improving immediate profits and long-term viability.
Do you see your business as an extension of your personality? This means you might be providing a service or product that meets only your needs. If you imagine that it’s your job to play Santa all year round, what gifts would you give your clients, whether they are naughty or nice?
It’s not possible to understand what you can give until you can see your business from their point of view.
Think of three typical clients:
- Who are they?
- Where do they live and work?
- What interests and motivates them?
And that card to go with the gift, how might you personalise the message to each?
4. The only stuff that’s secret is what you haven’t yet found out
Want to know even more about your customers? Ask them.
Want to know even more about your competitors? It may seem ridiculously simple, but Google them. There’s often no need to guess what the competition is up to. It’s usually online for all to see.
And if you’re feeling truly inquisitive, find some squirrelly way of soliciting how your customers feel about your competitors.
5. Are all systems GO?
It can be tempting to begin the new year assuming everything is in place and set to go… after all, it all worked okay last year, didn’t it?
- With more knowledge about your clients and competitors, do a systems check:
- What new skills do you need?
- Is there a need for a faster, more secure website with live chat or better in-store or over-the-phone customer service?
- Would your product descriptions make sense to someone who has never heard of you?
- Is there a staff member who has an interest in a more financially-viable role?
- Are you still relying on faxes when new software can do the job?
- When did you last update your accountancy software?
Sometimes smaller short-term investments can lead bigger long-term gains.
See 10 more tips tomorrow.
