70% of small businesses number one concern is cash flow. Is cash flow impacting your business in the lead up to the busy Christmas period?
Do you need funds to:
And in the meantime, here are some great advice from Business Victoria to address key small business financial concerns.
1. Cash flow
Cash flow is the life blood of business. If your business is suffering from poor cash flow then here are a few things that you could look at:
2. Rising Costs
Yes, business costs are rising, but that doesn't mean you can't get a better deal.
Try the following:
3. Taxation and business regulation.
As taxation and business regulations continue to change it's important to understand how as a business owner you can stay up to date with these changes.
A couple of ways to stay up-to-date is:
It's really important to keep your accounting records up-to-date. There is some fantastic cloud based accounting software (such as Xero) which make it so much easier to keep your records up-to-date.
Also, talk with your accountant or adviser before you make substantial changes to your business or assets (e.g. buying or selling a property). It's always much easier to plan for change than to try to clean up the mess afterwards.
4. Australian Dollar
The rise in the Australian dollar has impacted SMEs across Australia. As movement in the Australian dollar is largely driven by global factors it is difficult to determine how long it will stay at current high levels.
If you are an importer, you are no doubt happy with the high dollar, but how will your business perform if the dollar drops? You need to start thinking about this now.
If you are an exporter you will no doubt be feeling the pain. Improving the efficiency in your manufacturing or service delivery will help to reduce costs to offset the impact of the dollar.
Determining the profit made in each export market will help you to make decisions as to whether you should ride it out or change strategy. If you are going to ride it out, then work closely with your export customers on ways in which you can add value to improve price to offset the impact of the higher dollar.
5. Interest rates
The final financial problem SMEs around Australia are concerned about is fluctuations in interest rates and the impact of these movements on their business and lifestyles. While rates are relatively low at present, it might be a good time to think about fixing the interest rate on some of your debt.
Fixing the interest rate on your debt generally means that you are not able to pay off the debt faster than the agreed term, so it may be wise to fix the interest rate on a portion of your debt. This will give you some flexibility to pay debt down faster if needed.
As a business owner, you should also be aware of how increasing interest rates will impact your business. Including some scenario planning with your budgeting and forecasting is a good idea. This could be a simple as looking at the profit budget and cash flow forecast using a range of different rates.
Planning early will mean that you are ready to act quickly should there be a sudden movement in interest rates. If you don't have a cash flow forecast already, read our cash flow forecasting page.
Message from CAtherine
Occasionally I come across an interesting article to do with Home Loans. I thought I'd share some of these with you here.