How much attention do you give to your company’s ability to weather external and internal challenges?
If you engage in a systematic, periodic review of your business circumstances, you are more likely to pick up on issues that would be challenging. These challenges can arise from your business’ finances and external factors; witness the uncertainty surrounding supply chains and costs arising from our exit from the EU.
As with our own personal fitness, you will need to tackle business fitness in a systematic fashion.
At a minimum, we would suggest:
- Creating a financial business plan to compare with actual results
- Produce and review monthly management accounts paying particular attention to profitability, solvency, cash flow and credit control
- Have an annual planning meeting with your accountant to review tax planning options and other planning opportunities before the end of your trading year.
Be First In Line
Be prepared to flex your plans if circumstances change. Early adaptors to adverse conditions are more likely to survive.
Clear Winner: Manage Your Cash Flow.
If you maintain a profitable and solvent business the issue that will likely catch you out is taking your eye off cash flow. Ask yourself:
- Are your customers exceeding their credit terms?
- Are you paying your suppliers too early?
- Are you maintaining a cash buffer to see you through temporary dips in activity?
- Do you keep in touch with your bankers, providing them with regular management accounts and cash flow forecasts?
Cash flow management should be a key item on your business fitness check list.
Get Into Shape
If you would like to assess your present level of business fitness and create an ongoing fitness plan, please call so that we can discuss your options.
Fortune favours the brave, but it also favours those who are prepared!