You are probably all fed up of hearing that these are ‘uncertain times’ but unfortunately it is still very true. As the lockdown eases, we are all hoping for a lovely big economic bounce back to restore the world to what it used to be. But what if this doesn’t happen?
If the future economy does not bounce back fast, if people and clients have less job security then we all need to do what we can to protect our business.
Time to think a bit about ‘hoping for the best but planning for the worst’ ……
So without trying to pour any more gloom onto your day, please find below a few ideas that you might want to look at when trying to protect your business:
- Review your debtors! Keep on top of your debtors – the people and businesses that owe you money. Chase your debtors, ring them up, arrange payment plans – build a future plan together to cement your future relationship.
- Do you ask for deposits for work you are going to do? It is perhaps time to review the amount of deposit you ask for before you incur any spend so if they decide to cancel the order or cannot pay at the end of the job then you have at least got enough cash from the deposit to cover your costs.
- Do you always invoice after you have done the work? You might want to re-think this and look at getting staged payments or payments over a period of time starting as soon as you start the job or earlier.
- Look at your creditors – the people that you owe money to. Can you arrange payment plans to spread these costs for current outstanding invoices and for future ones?
- Review cash regularly and try and forecast your cash flows so you know when the crunch point will be and try to plan for them.
- Do you have a lot of stock in your business? Every bit of stock that you hold is less cash in the bank account. Can you reduce this to try and keep cash in the business?
All these ideas are to try to help you keep your business secure and to try and ensure that you get paid for the work that you do on a timely basis. You will not be the only business looking at these options, your competitors and suppliers will be looking at doing this too.
We are aware that there are a lot of things to thing about at the moment but it is worth just spending a few minutes thinking about the above. The world has changed and this is an opportunity to change your systems to ensure that you are more secure in the future. Want some help? No problem, just get in touch!