As a general rule, businesses must always place a strong emphasis on the management of their finances regardless of their size, scope or the industry that they work in.
This type of outlook is even more important in the current economic climate, however, with the looming spectre of Brexit continuing to devalue the pound, also it’s driving inflation and keeping interest rates at all-time lows. With uncertainty rife and the macroeconomic conditions increasingly perilous, entrepreneurs must take a proactive approach to managing their finances and maintaining a healthy profit margin.
From Business Funding to Cash Flow: How Firms Can Cope in the Current Climate
With this in mind, what are the key steps that entrepreneurs must take if they are to successfully thrive in a challenging, economic climate? Consider the following: –
Seek Out Flexible Forms of Funding
Managing the debt that exists within your business is an excellent place to start when organising your finances, whether you look to restructure an existing liability or need to seek out additional funding. In the case of the latter, it is important to minimise the long-term debt that you take on, primarily by using creative investment methods that do not require you to sacrifice equity or make repayments over a sustained period of time.
Take invoice financing and factoring, for example, which is offered by firms such as Touch Financial and enables companies to sell their accounts receivable and enhance their level of cash flow. Creditors are subsequently repaid when clients complete their own repayment, creating a short-term cycle of debt and real-time growth.
Minimise Unnecessary Overheads
The issue of cash flow is another interesting one, as a steady stream of revenue enables you to remain active and competitive in your chosen marketplace. While factoring can help with this, you may also want to consider minimising your overheads, as you look to capitalise on various technological advancements and create a more flexible business model.
It is now easier than ever you employ remote employees on a temporary basis, for example, which allows you to maintain a productive core of staff members while adapting your workforce to suit changing workloads. Temporary structures and pop-up stores can also be used to reduce the cost of commercial leasing, without compromising on the businesses ability to trade.
Outsource Your Accountancy Needs
On a final note, it is crucial that your finances are managed by knowledgeable and experienced service providers. While you may have some experience as an entrepreneur, it is increasingly difficult to manage your finances and tax requirements as the business continues to grow in line with demand.
There is another benefit of outsourcing your businesses accountancy needs, as this ensures that your finances and tax repayments are managed in a way that is compliant with UK law. This is crucial, particularly as legislation is constantly changing and placing variable demands on entrepreneurs.