Setting up a small business requires you to be strategic, as it is often about risks which could make or break your fledging business. For your small SME to really make it, I’ve written some basic tips to keep you ahead of the pack.
Cash Really Is King
Fix spending budgets for your new business, and don’t offer too much credit. Creating cash is the trick to having money to invest. Nobody cares how much you are owed, only what you have available to spend!
Try going to Tescos and telling the person on the till that you will have plenty of money next Friday .. only cash there and then will see you leave with your groceries!
As you well know, cash is hard to come by and can only be generated sustainably by profits. It’s also a good idea not too give too much of your cash to customers (by making them pay on time), and certainly not too much to suppliers (by keeping expenditure down) .. and you must keep your tax bill tight.
That way you will actually see your money working for you so that you can make more profits. What goes around, comes around!
Expense receipts need to be kept to avoid a series of accounting, tax and hence cash problems. You need to keep receipts which account for every expenditure you make. Some people save them in an envelope instead of stuffing them in pockets where they are most likely forgotten. Better still, you are now allowed to photo and store them in the cloud.
You should always stay on top of customers or clients that owe you money and not let them string out the time before you get paid. In effect, they are holding cash that belongs to you, and that you could be investing in your business if only you could lay your hands on it!
When payment is made, you should immediately check off that the owed money matches the invoiced amount so mistakes are tackled early .. it gets harder the longer you leave it.
For help with tying up all those invoicing loose ends try a free 7 day NumberJuice trial.
NumberJuice is a Cloud invoicing tool that can really help you stay organized, issue timely reminders automatically and keep track of customer payments all under one roof. Trial it today .. it’ll help build your available cash!