There are many aspects of a business that impact on its viability. Looking at each of these gives you information that can become a tool in helping to build a business that is more profitable.
Put simply, a successful business has more cash coming in than going out. This won’t happen automatically and it is important to take the time to create a cash flow projection. From this projection you can see where changes might need to be made to keep your cash flow positive.
Keeping track of goods for sale, materials and consumables used in the production of items for sale and office equipment is essential for good management of your business. You will be able to ensure you have enough stock on hand to meet demand, and regulate your expenditure.
You may be looking for capital to start or expand your business. There may be several options for this and it can be useful to look at the short and long term implications of each option.
The key to managing your tax obligations is accurate information about which taxes apply to you and what the reporting and payment requirements are.
Understanding these factors and knowing how to assess them can be vital to ensuring you get the maximum profit from your business. For more information call us for an appointment.
Whether you’re starting a new business or have an existing one, a cash flow projection is a very important and extremely useful tool for building success. It’s pretty simple to figure out that a successful business has more cash coming in than going out. Unfortunately, this doesn’t happen automatically. It takes some fine tuning to get it right.
Your cash flow projection needs to set out what your revenue and expenses are expected to be throughout the year. Depending on your business you can do this on a monthly or weekly basis. It is important to be realistic and conservative with your anticipated revenue figures. Being too optimistic here will skew your projection and make it unreliable. For expenses you should include rent, insurance, wages, power, telephone, marketing, inventory etc. Your projection becomes your planning tool. If the information you use for your projection is unrealistic, your planning won’t achieve the results you wanted.
Cash flow projections can show you where cash flowing out will likely exceed cash flowing in. This allows you to have a plan to ensure you have the extra funds when needed. Or you may need to look at ways of increasing revenue over that period – say a sale, special event, some targeted marketing or using a line of credit.
Creating a cash flow projection takes time! To make the most of your efforts you should monitor your actual performance against the projection throughout the year. Don’t wait until the end of the year when it may be too late to make changes. Keep an eye on your cash flow! Adjusting it when necessary means you can respond early to warning signs.
We can help you with your cash flow management. Exploring your options for increasing income to make sure you have a healthy positive cash flow is just one of the services we can provide. Some of the items we can consider with you include how you manage invoicing, purchasing and levels of inventory and conduct a review of your overall expenses. Call us today for an appointment.