As you will have gathered, there is much information that you need to obtain as part of your regular management information. As explained in Tip 6, one major area that all business owners need to see and understand is the sources and application of CASH within their business. This enables you to understand: How much, … Continue reading Tips for Business #10: How to get the information you really need to see – Your next step.
Bookkeepers are the key to maintaining an accurate set of accounts. They may be employed on a part-time basis and can often be an outsourced resource. Remember the old adage garbage in, garbage out. It can often be the case that people are employed and given the title “bookkeeper” when in fact they are merely … Continue reading Tips for Business #9: How to get the best out of your bookkeeper
In recent times, banks have been on the receiving end of some very bad press coverage. Amongst other things, banks have come in for criticism over their failure to advance funds to independent businesses either via loans or overdrafts. It is my view that in the past, banks have been reckless in advancing funds to … Continue reading Tips for Business #8: How to get the best from your bank manager
Everyone knows that the longer it takes your customers to pay you, the worse your cash position will become. However, just because your debtors are high at the end of the month, doesn’t necessarily mean your debtors are taking longer to pay! For example, if your annual sales are £2.4m with debtors at £800k, all … Continue reading Tips for Business #7: How to see the wood from the trees – customer’s debts
Businesses can be aware of the profits or losses they are making during the year. However, many business owners do not understand why their bank balance may have reduced even though their accountant tells them their business is profitable. Very few business owners have a clear understanding of whether their business is generating cash or … Continue reading Tips for Business #6: How to know where your cash has gone
Do you believe that raising prices will turn customers away? Do you think that dropping your prices will bring a flood of new customers? Do you think that either will make your profits soar? The truth is reality can be very different! For example, a 10% price increase on a gross profit margin of 30% … Continue reading Tips for Business #5: How to decide whether to increase or decrease prices or offer discounts
Continuing on from part one, here are the remaining tips on how to manage your cashflow in business. 5. Always find out what the credit terms are for each of your suppliers. If a supplier is expecting to be paid at the end of the month after the invoice was raised, then don’t pay it … Continue reading Tips for Business #4a: How to successfully manage your cashflow – part two
Many people assume businesses collapse because they are loss making. However, the reality is businesses go bust because they run out of Cash. Always remember “CASH IS KING” The primary purpose of a business is to attract, maximise and retain customers. Everything that contributes to this is an investment; anything which doesn’t is a cost. … Continue reading Tips for Business #4: How to successfully manage your cashflow – part 1
The problem for many business people is the sheer volume of numbers they receive from accountants and bookkeepers. As a business owner you need to know which numbers are important and what they reveal. In other words you need information, (and not data), presented in a way that makes sense for your business. There are a … Continue reading Tips for Business #3: How to make your accounts something you want to read!
There are three ways to increase turnover Increase your customer base Increase your prices Increase the frequency of when customers buy from you. If more than one of these takes place, then turnover growth is exponential. For example, if your business could achieve an increase of just 10% in customers, prices and frequency of purchase, … Continue reading Tips for Business #2: How to increase turnover