Good control over cash flow is considered vital for all the businesses. For growing businesses, it is crucial –any kind of cash constraints would be a major contributor when it comes to limiting the growth. Plus, over-trading can have really worst effects. Making the most of your finances
When you are doing some sort of business planning assessing any new opportunitiesit is always considered a major factor to use the finances in the best possible way. When you have limited resources, you’d have to pass some of the promising prospects if you would not be able to put aside the essential funding for your business.
Control your working capital
All the elements of your working capital need to be controlled carefully for maximizing the free flow of cash. Managing credit effectively and having a tight control onyour overdue debts would be essential. It is also an option to think about raising finance against the trade debts.
Supplier management & stock control
Effective management of suppliers and good control over your stock would get very much important when the businesses start growing. Holding any outdated stock would turn into a major problem that should be cleared up periodically. You’d like to work on this with your suppliers for reducing the delivery cycles. Another option is to opt for systems and suppliers which are able to handle the just-in-time deliveries.
When you do some planning ahead of time, it allows you to anticipate the financing needs that you have along with arranging suitable amount of funding. Many of the growing businesses find it a major decision that whether they should bring in any outside investors forproviding the required equity to underpin the further expansion or not.
Keep on trimming the costs
It does not mean to be ‘tight’, or that your suppliers should be badgered every week to get some discount. However, it actually means that you should keep an eye on where your money is being spent and to ask yourself that whether you are best using your resources or wasting them. When it comes to essential services in which buying any particular brand doesn’t really matter, you should do some shopping around. Saving only few dollars every month would soon make the amount big. Review your costs with the suppliers after 6 months everytime. The suppliers who are smart enough easily understand that it is more expensive acquiring new client compared to retaining one they already have.