Managing cash and business finance badly is one of the main reasons for business failure. Any time you spend working out your business finance needs and monitoring cash flow is time well spent. By doing this, you can:
- Find out when you might not have enough cash before it happens
- Find out when you might make extra cash and use it efficiently
- Make sure you have enough cash for any necessary capital expense
- Find out how to use your resources more efficiently and reduce costs
Also, think about the period of credit you allow your customers or get from your suppliers: don’t let your customers get too far in debt to you, or you won’t be able to pay your own bills. Try to impose the same terms on your customers as you get from your creditors.
Advice on raising business finance
If you need access to business finance, your bank will want to see your previous bank statements and you’ll have to make a strong case why they should take a risk on you. Make sure your current account balance matches the opening bank figure in any cash flow forecast you produce. Say exactly what you want the money for.
Every new business needs money when starting up. The majority of businesses will need to buy equipment, establish the workplace and meet marketing costs – all before the first sale is made. Once you’re trading, you’ll need cash to pay the bills and keep the business going.
Advice on a range of business finance options
We can advise on a range of business finance options and help business owners choose the right ones for their business. Most businesses use a combination of business finance options, according to their specific needs and circumstances.