Whilst the festive period represents a welcome break for some, it can be a busy time of year for many small to medium-sized business owners. The race to get work completed before the year is out coupled with the desire to launch full throttle into the following year, can often seem unachievable. However, Bibby Financial Services is encouraging owners and managers in the South West to ‘stop and pause’ and review their business to ensure it’s in the best possible shape for the year ahead, which is set to be another challenging twelve months.
Ashley Clarke, South West head of sales of Bibby Financial Services, comments, “While Christmas is a busy time for many owners and managers – trying to finish 2008 on an even keel and find the time to plan for the next twelve months, reviewing business practices is an invaluable exercise for the year ahead. With another tough year upon us, owners and managers that invest the time now will reap the rewards of their efforts well in to 2009.”
With a ‘Business health-check’ in mind, Bibby Financial Services has developed a tip for each of the twelve days of Christmas for owners and managers who want to get their business fit for the New Year and beyond:
1. Be realistic: Whether you are just starting out, or want to develop your business further in the new year, be realistic about what you can achieve. Know your strengths, how they can be best be utilised within your operating environment and the current economy. Don’t be afraid to seek professional advice where both you and your business will benefit.
2. Credit check: Don’t hide in your shell when it comes to customers, credit-checks bring security and peace of mind. With the current economy, you may already be experiencing longer payment terms, however a common and accepted business practice, credit checking ensures a smoother business relationship overall with no nasty surprises further down the line. Keep an eye on customers’ payment trends and spot potential problems before they become major issues – forewarned is forearmed.
3. Get protection: In the current climate being prepared for bad debt is crucial, avoid payment problems before they happen. Research shows that 47 per cent[1] of owners and mangers have no provisions in place to cope with bad debt. Investing in bad debt protection ensures you receive payment, even if your customer becomes insolvent, bringing security and peace of mind to areas otherwise beyond your control.
4. Review suppliers: Are you getting the best deal from your suppliers – shop around and negotiate longer credit terms (you don’t get if you don’t ask!). Suppliers are keen to keep as much business as they can so take advantage of any special deals on offer.
5. Keep in contact: Can your customers contact you easily? How do you communicate with your core customers? Regular communication is key to knowing your customers and keeping your business front of mind. Assess the communications tools you currently use – from the simple things such as answering machine messages, to customer newsletters and your company website.
6. Read the small print: If you are looking to secure business funding don’t be tempted by the largest amount without thoroughly understanding the fee structure and reading through all the terms and conditions. If the sum on offer from one lender is significantly larger than the rest, you could still pay dearly so be sure to go through all the small print. There are many alternative finance solutions, such as invoice finance, available instead of the traditional bank loan or overdraft. Make sure you explore all the options before signing on the dotted line.
7. Be prepared: Businesses need a nest egg too. From a surprise tax bill to a quiet patch, it’s good to ensure you have the funds available for the unexpected. Regularly review your financial arrangements, to ensure they are in tune with your ongoing needs.
8. Cash is King: You’ll need a strong cash flow to keep your business afloat, if this is stalling because of orders waiting to be confirmed and late payments it may be time to enlist outside help. Invoice financiers like Bibby Financial Services allow businesses to raise finance based on the value of their outstanding sales invoices, releasing up to 85 per cent of the value as it’s raised. A much needed cash injection is provided up front and then an ongoing source of funding that grows in line with your sales growth. Invoice financiers also provide a valuable collections service to chase outstanding payments.
9. Take a fresh look: Are you sitting on a cash-cow without realizing. Take time out to look afresh at your business offering and operating area because, even a slight shift that perhaps seemed unfeasible even six months ago, may now dramatically boost your bottom line.
10. Spend quality time: It’s essential you take time out from work if only to tackle any pressing issues with a clearer perspective. And as well as enjoying some quality time with friends and family, many owners and managers have their best ideas when they are out of the office.
11. Shout about your success: Don’t be afraid to blow your own trumpet. Establish what makes your business unique (cheaper, greater choice, locally based, innovative etc), and let people know about it. Remind existing customers why they work with you and let potential customers know about your business and how you can help them.
12. Get the team behind you: As your business grows it’s important to keep everyone in the loop and drumming-home the ethos, and goals of your company, as well as any recent developments and successes. Including your team in your vision keeps your business focused and strong and builds a loyal and motivated team of employees behind you.
To see how three real-life business owners are preparing for the final push before Christmas and planning for the year ahead visit Bibby Financial Services’ www.live-business.co.uk website where entrepreneurs Rebecca Davies, Sam Fisher and Maggie Andrews will be updating twice weekly blogs with news of the business challenges they face day-to-day, and trying to win an audience with a panel of business experts that includes Dragons Den’s Rachel Elnaugh.
Visitors to the site can also view top tips and advice from Bibby Financial Services on everything from business challenges, bad debt protection and how to cope with late paying customers.
