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This is a guest post.
There are doubtless some people out there that think businesses run themselves and the owner simply pockets the profits. If only that were true there would be lot more business owners laughing their way to the bank.
In truth of course, running a business successfully is not that simple. With so many ducks to get in line, and then keep them there, it’s a constant battle of monitoring progress and planning ahead.
Cash is King
Without doubt having a firm financial footing is paramount and so access to credit is vital to cover day-to-day running expenses and keep supply lines moving. Many businesses fail to do so because they ignore the importance of good cashflow management.
Whoever coined the phrase “turnover is vanity whilst profit is sanity” had it spot on. Companies that chase sales without giving collection of the subsequent debt too much thought will sink very quickly. Remember, a vertical sales chart might impress some people but until those sales are paid for, there is nothing in the bank. With this in mind, any business with a dynamic sales force also needs a very good credit control team.
Crunch the numbers
With all of those sales and (hopefully) payments flying around it is important to account for them accurately. And whilst for most business owners, “doing the books” is absolutely the last thing they want to be doing, paying someone who enjoys counting beans will save money in the long run. Good bookkeepers are priceless, and if they constantly annoy the rest of the staff with their pin-point attention to minute details then all the better. Remember whose money they are looking after.
Accurate accounts will also benefit a business looking for additional funding. Bank managers and other commercial finance providers will look a lot more favourably at a company if they are confident that the numbers are correct and the forecasts achievable.
Lay off some risk
The law requires all businesses to have a certain level of employer’s liability insurance but these days cover is available for just about every aspect of an operation. Be it buildings insurance, credit insurance or van insurance, businesses can spread risks and avoid being caught out when something unforeseen happens and threatens to bring everything to a grinding halt. Protecting valuable assets, or making sure they can be replaced quickly, will ensure continuity and help avoid costly downtime.
Now you can laugh
It’s clear then that running a successful business brings with it a whole host of things to consider. And it’s only those business owners who have ticked all the boxes, and continually go back and tick them again, who can afford a quiet chuckle as they bank the weeks’ takings.