A business is an organisation composed of a group of people who work together for a common goal. In this regard, it may seem strange to talk about the habits of a business – but it isn’t, really. Habits are not just confined to people, after all – habits are continual actions that even organisations (such as businesses) can accomplish. Create healthy habits for your organisation. People who want their businesses to grow must write progressive financial procedures, and stick with them.
Question: is it worth it?
First of all, you should treat each and every expense as an investment. If, in the long run, you are not getting out of it more than you put in, it simply isn’t worth it. Do you really need to spend those hard-earned pounds on new software? Maybe, but only if it ensures greater efficiency; saving you time and money to do other things. Do you really have to redesign your packaging? Only if there’s a good chance that your product will sell better and your income increases.
Mind your cashflow chart
Mind your cashflow chart regularly and not just at the end of the month when it’s time to review and make your reports. In fact, some successful business managers claim that they review their cashflow charts every day – they make time for it. Note down every expense that you have had, and list down the expenses you foresee in the future. In the other column, write down all your income and make a projection of possible future income. Reviewing your cashflow every day will help you stay on track. Managers need to understand that cashflow is the life blood of a business, and they need to stay on top of it – at all times.
Make sure to collect
It’s not a pleasant task to knock on doors or to make that call to remind a customer that they still owe money – in extreme cases, it can be like walking through a minefield. But don’t expect your customers to shell out money without regular reminders. Make sure your invoices are detailed and clear; the customer needs to know exactly how much he or she owes you, and when the payment is due. If the customer is late, send a reminder promptly and follow up the invoice regularly. You might even need to list the help of a debt collection agency if the customer is point blank refusing to pay you.
Regularly set money aside
It may be tempting to use your income to expand, to make improvements, and to build. As a manager and business owner who is constantly scrutinising the everyday operations of your business, you probably see a lot of issues and feel that there are many things that need fixing or improving – it’s a normal reaction. Furthermore, you may feel that money sitting in a bank somewhere doesn’t create earnings and you feel that you should be using those funds to generate further income instead. But, like taxes and death, rainy days are certain to come.
Be prepared for periods when things don’t go as smoothly as you would like. It is important to set some money aside. The improvements that you want to implement can usually wait until you are sure you can deal with unexpected blows. Only when you are sure you have a crisis fund should you expand your operations.
It requires some discipline, and some of the tasks may seem rather tedious relative to the action of everyday business operations, but taking some time to go over the paperwork and review your financial habits really does increase your chance of success. And remember, habits are learned. They take some time. If you would like help with your cashflow (and improving your financial habits) you can always turn to experts in cashflow such as ultimatefinance.co.uk.
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