Has your business got what it takes to succeed in the burgeoning UK economy? Improvements in the economic situation can be greeted with relief but did you realise how growth can also be a problem for many SMEs in the UK? Effective cashflow management is crucial at all times, but particularly when a business is negotiating and managing growth. Without healthy cashflow, business growth is stalled and may be affected for years to come. Using effective management skills for your business is one way to successfully enhance cashflow.
How to Make Business Growth Ideas a Reality: Focus on Cashflow
Many business owners have a wealth of business ideas but lack the key management expertise to get them flying off the ground. It is usually more attractive and exciting to plan new concepts and line up new aims than it is to focus on the day-to-day management of the company but it is through using skills in this area that is essential to driving business growth. For example, managers who can successfully spot cashflow problems in advance and put strategies in place to minimise the negative impact are better able to push forward with new products, ideas, and concepts in the market place.
Key Skills for Cashflow Management: People Skills
While it may be tempting to think that cashflow management skills must be purely financially led, it is important to recognise that people management skills are also crucial. You need to be able to effectively manage the team of people around you, from suppliers to customers and creditors. If you have developed good relationships with creditors and suppliers you will be better able to negotiate better terms on supplies, set up an extension of payment terms, or build a better solution for buying assets. You will also be able to offer discounts to customers in return for shortened payment terms – useful for when you want to build trust and also generate better cashflow.
Key Skills for Cashflow Management: Stock and Resources
It is also important to be able to effectively manage your stock and resources. Do you have cash that is perennially unavailable in slow-moving stock or directed into areas that are usually unprofitable? Monitor stock on a regular basis to ensure cashflow is healthy. Many managers do not fully understand how the cash operating cycle for the company is important for the healthy functioning of the business, particularly when it comes to business growth. The longer the stock you buy is sitting on your shelves, the easier it is to get into cashflow problems. All suppliers need to be paid on time to avoid penalties.
Cashflow Solutions for SMEs
Anticipating periods where you are likely to be tight on cash is also important. Getting access to funds to tide you over during these periods is useful. A quick search revealed providers like ultimatefinance.co.uk offering bespoke solutions for SME cashflow finance. It is important that you anticipate problems and get solutions in advance, before you are already in financial trouble. This requires management skills and expertise in looking ahead and monitoring the long-term health of your company’s finances.
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