Assessing your business’s cash needs

If your business is starting to struggle for money then it is time to assess your assets and find people to invest cash into your business. You never know, you may be sitting on more than enough money to tie you over without even realising it, so how, exactly, do you assess your business’s needs?

Knowing your assets

Understanding what assets you currently have will help you predict how much your business will be worth in the future. For example, if you own a commercial property that costs £100,000 you can find out how property prices are predicted to change and work out how this will affect you as a company. Similarly, this can be done with any of the company’s cars, machinery, computers, furniture and even stocks if it is a public company. There are several ways that you can tap into these assets to find fresh cash flow, for example you could:

•    Sell the assets
•    Take out a loan against the asset
•    Lease out your assets

Finding any problems

Before looking into various forms of financing, make sure that you have patched up any problems with your current finances. To do this you need to carry out a full audit, finding out where you are losing money and deciding what needs to be done about it. If you are able to catch these problems early on then you may even be able to continue operating without finding external investments.

Protecting your assets

While selling your assets may seem like the easiest decision and the fastest way to raise money, you need to be careful as it’s your assets that give the business its value. The more you sell, the less your business will be worth; therefore you will want to try and protect your assets as best you can. This means looking at other forms of financing in order to build the equity you need to help your business thrive.

Knowing what’s out there

There are hundreds, potentially thousands, of sources of financing out there; you just need to know what’s available to you and where to look. By pulling together all your assets you can give your business much greater appeal to lenders by showing that you have the collateral to lend against, making you a less risky borrower. Another alternative would be looking into making your business a public company, allowing you to sell shares to investors which will bring in fresh cash flow to help develop and expand your current business.

Private investors

Never underestimate the amount of money people who are willing to invest. With the current interest rates being what they are, more and more people are taking the risk of investing their money in businesses. By branching out and trying to find investors, you could not only drastically increase the amount of cash available to your company but you could also enlist the expert advice of experienced investors in business. In terms of developing your business, advice can be just as valuable – if not more – than a cash injection, helping to show you the best way to progress as a company.