May 21st, 2014.
7 Top Tips For Keeping Your Business in the Black
Every business wants to stay on the right side of the balance sheet, right? Right. We appreciate it’s never easy, but there are a number of great ways to keep yourself profitable and healthy over the long term.
Here are 7 ways to keep your business in the black:
#1 – Remember, Not All Debt is Bad
Before we look at ways to establish how to avoid business debt and keep your company running as smoothly and profitably as possible, it’s worth remembering that debt isn’t necessarily bad. You just have to make it work for you, not the other way round.
If you can source the right finance that allows you to plan for the future, specialise your product offering and boost your long-term profits then it’s a price worth paying. Just remember, some of the world’s biggest businesses have got to where they are today by using debt wisely.
#2 – Shop Around for Finance
And when you are looking for funding for your business, it’s essential to shop around. Don’t just opt for the big names and the online comparison sites – pick up the phone to broking experts too. The more avenues you go down to find finance the more chance you have of picking up the right deal.
The same goes for refinancing too. If you find yourself paying too much for past finance, see if you could negotiate the sum down by shopping around.
#3 – Analyse Your Outgoings
As the old saying goes, every little helps. The most successful entrepreneurs are those that keep an eagle-eyed view on their company’s outgoings. Whether it’s helping staff to minimise expenses away from work, eliminating office wastage or introducing methods to cut costs on facilities, there are hundreds of ways to bring your costs down.
#4 – Budget, Budget, Budget
It may sound boring, but if you’re budgeting properly then you’ll be far less likely to find yourself with a financial headache at the end of the month or year. Use accounting software to project your profit and losses and keep on top of things.
This way, you’ll be able to plan more pertinently for any bad times that are around the corner and keep your business on an even keel.
#5 – Outsource, Don’t Employ
Staff costs are usually a company’s biggest expense. And many businesses find themselves in the conumdrum whereby they need more staff to grow but may struggle to afford the hiring and training costs. That’s when it can make sense to pay slightly more per hour to outsource your work to experts instead of employing and training staff permanently.
Or, if you’re sure of long-term growth and want to keep your costs down in the next few years, it’s probably best to commit to permanent members of staff.
#6 – Boost Your Cash Flow
The majority of business money worries fluctuate each month. So it’s always looking at flexible ways to give your cash flow a much-needed boost when you need it. One of the best ways is through invoice finance – a process where you unlock funds that are yet to be paid to you by clients.
#7 – Focus on Client Communication
Fed up of waiting for clients to pay up what you’re due? Focus on the problem before it starts by paying particular attention to your clients. If you’re communicating well with your clients they’re less likely to neglect or ignore you once invoice time arrives. To incentivise quick payment, you could even introduce special ‘offers’ or rebates to those who pay early.
What do you do to help your costs down to a minimum? What special techniques do you have? Follow us on Twitter and let us know.