When talking about economic issues, one of the main problems in small business is financial planning because “generally know how to properly manage their resources and prepare to have an emergency fund in bad times,” say experts.
It happens with many companies, when they start to go well forget to plan and lose sight of the risks encountered, especially in times like this that the economy is so volatile,
The cost of advice, for example an independent accountant to business can represent about 10% of the total expenses of the company, which is not much if the results that this decision may represent future is considered,
When creating the management strategy for your business, it is important to think about issues like recession. That does not mean live thinking that the company can close overnight, but become aware of the bad ‘spurts’ that may arise and how to avoid it. Here are some recommendations to make good use of your resources.
1. Stick to a plan.
You should always have a budget of income and expenses (outflows) of your business, which will guide you to make financial decisions , especially if you got some credit for your business. Hold on to this planning updating it according to your needs and economic moment you go on living.
Interest, inflation and exchange rates are indicators that will help you project clearly how your money is moving, just one example: prices and raw material costs are changed just the interest. In the company must have a responsible media consulting and page of any bank these indicators and make projections.
2. Know your territory.
To take clear accounts is to know “where the shoe pinches your business to improve “.
A good way to gain more knowledge on how to better manage money is to analyze some data on the sector in which you operate. Find out how much sales dropped in your activity at other times with crisis? What were the worst months? Your industry goes into a recession before, while or after the national economy?
3. Clear accounts.
Keep a daily record of your income and expenses. That flow of inputs and outputs is the basis for creating your management strategy. It allows you to plan your payments and, in turn, define your balance, this is what is in the immediate debts and how much capital you have available to pay them off. This is a good “thermometer” to know what type of financing can ask for your company.
4. Keep a calendar.
Respects in full the deadline set to meet your financial obligations, such as credit cards or loans received. However, not because you get a “good run” have to spend more than directed. “Sometimes the employer registers an increase in earnings, is engolosina thinking that this may be permanent and even seeks to increase credit lines, without considering that currently a very voluble stage lives, and at any time there may be ups and downs that prevent compliance with its economic goals.
Another option to meet your payment obligations or out of an emergency is to keep an open line with a bank, but this must be requested only when you have considered your ability to grow and based on the alternatives that the bank offered to restructure the debt in installments greater.
5. Look for new options.
Interviewees agree that the financing cheaper the internal, ie, as a company must generate sufficient profits and reinvest to grow.
However, there are other ideas you can consider to multiply your resources, as long as you have made an assessment of what it means to start growing your business with a loan:
– If it is a high-tech company you can resort to venture capital or angel investors.
– If you lean considers a bank loan if you already have financing was in this way, the Commission seeks to fully capture the first loan.
– If you have had a loan with microfinance there is the alternative of returning with them, assuring them that the new business line represents good yields. Visit http://www.offalyceb.ie/ for more tips and reviews.