How to Improve your Business financially
How to Improve your business financially: An important part of your business plan should be to improve the financial position of your business. Good financial management will help your business to make effective use of resources, fulfill commitments to your customers, gain a competitive advantage and prepare for long-term financial stability.
Ways To Improve On Your Business Financially;
Have A Clear Business Plan:
A business plan is the road map to gain your business success, a business plan will establish where you are and where you want to get to over the next years, it should include detail on how you will finance your business and its activities, it includes how to source resources or capital you will need for your business transactions.
Business is bound to suffer growth if marketing is neglected. Marketing is one of the most important factors in business strategies and growth. For a business to improve financially, it is necessary to have a good marketing strategy. A competitive business needs a good marketing plan to succeed and attain its financial status.
A good marketing strategy goes beyond traditional marketing like handbills, flyers, newsletters, radio jingle, etc. it should go digital like adding online digital marketing, like email marketing, content creation, social medial marketing, etc.
Monitor your financial position:
In maintaining your financial position, it is important to ensure that you keep a proper accounting record for easy analysis of your financial report to determine if your business is progressing or not.
Though your monthly report or annual report is important but most importantly the regular check and monitoring of the progress of your financial record on a daily basis is most important, and review your position against the targets set in your business plan.
Ensure Customers Pay You On Time:
Businesses can run into major problems because of late customer payments or none payment of customers which often result in bad debt and a negative effect on the business returns.
To reduce the risk of late or non-payment, you should make your credit terms and conditions obvious from the outset. You should also quickly issue invoices that are clear and accurate. Using a computerized credit management system will help you to keep track of customers’ accounts.
Be Customer Friendly:
Customers are king. For this very reason, you have been customer friendly and have a good relationship with your customers. Customers patronize people they have a good business relationship with. Read
In your quest to ensure customers pay on time, you need the wisdom to approach them because they are one of the reasons why you are out for business.
If you are not careful/friendly enough it might affect your relationship with customers and the moment your customers have a misconception about you, it will affect the business growth.
Business needs capital to keep it growing and to operate effectively, It is never a bad idea for you to apply for a loan either from a commercial bank or microfinance bank to improve your business in other to increase cash flow and ensure the loan was used for its purpose in other to yield increase.
Also, don’t be anxious to collect a loan, take your time to study the terms and conditions of the loan to know if the interest rate is too high or not. This will help you to know if the loan will affect your business positively or negatively.
Know When To Invest:
Your ability to know the right time to invest makes you successful in the market. If the right time to invest approaches, do it earnestly so that you get positive results.
If you have no knowledge in investing, have only a very limited amount to begin investing but recognize the need to begin the process.
I recommend that you go online learning all you can about stock and bond investment. Education is the key to all types of investment. Begin educating yourself now, education is power.
Know Your Day-To-Day Costs:
Cash flow is the difference between the cash a business received and the cash a business payout.
So a business can increase its cash flow if it increases the cash it receives and decreases the cash it pays out in a particular period. Cash flow is critical to business success with some believing that businesses fail because of poor cash flow management and not because of lack of ideas.
Increase cash received, which includes: practice better account management, be more diligent in following up money owed to the business by customers in account in the account receivables.
Keep Up-To-Date Accounting Records:
Record-keeping helps you to improve your business financially including the income and expenses, this gives you a clear picture of the business and knowledge of how to go about your business and improve it.
Record keeping gives you insight if the business is improving or not. Also if your record is not up to date, you could risk losing money by failing to keep up with late customer payment.
Good record keeping will help you track expenses, debtors, and creditors, and to know if there is a need for a loan or not.
Become More Efficient And Control Overheads:
Is your business operating at its most efficient? Saving energy and making more returns can happen by implementing changes in behavior and using existing equipment more efficiently.
It is one of the easiest ways to cut down costs and improve productivity and also areas to look at in an average office include power consumption (electricity and diesel consumption,) repair and maintenance, cost of items purchased.
Efficient stock control ensures you have the right amount of stock available at the right time so that your capital is not tied up unnecessarily. A proper inventory system to control and regulate the stock level, taking control of this will allow you to free up cash while having the right amount of stock available.
Having the right quantity of stock enables you to meet up with customer demand and at any point in time and this increases sales and the finance of the business.
Get The Right Funding:
It is essential that you choose the right type of finance for your business – each type of finance is designed to meet different needs. Smaller businesses usually rely more on business overdrafts and personal funding but this might not be the best kind of funding for your business.
Tackle problems when they arise:
The fact is every business has its challenge especially financially. It is always very stressful facing financial problems in business, but there is help and advice available to help you tackle them before it gets too much to handle so seek professional advice as soon as possible. There are also some initial steps you can take to minimize the impact such as tackling priority debts first and assessing how you can improve your cash flow management.
Conclusion And Recommendation
There is no business without a challenge. Every successful business today, at some point has faced some challenges. The above-highlighted points, if carefully followed, can improve any business from endurance stage to stability, which will make it successful. Take the above steps to improve your business today and the success will become significant.
Hope you find this piece relevant? See you at the top.