A money detox means that your company has issues with how it manages its financial resources. It also means that you might be making lots of cash, but your bottom line is not improving or you may not be able to find the capital to grow your business, either way, your company is not reaching its growth potential. Here are some questions to ask yourself about your business and a few financial solutions if you need them.
Do you Have a Great Banking Relationship?
One of the most important things for an SME to have is a close working relationship with their bank. Your bank is someplace more than just an institution that holds your money, cashes and allows you to write checks, and sends you new calendars each year.
Choose a bank that specialises in helping small businesses, with specific strategies and tools that can help to grow your company. Here are things you should expect from your bank:
- A full range of financial services, including business loans and lines of credit that are customised to fit your business.
- Full online banking services.
- Financial tools that help your business become more effective and efficient
- Business advice that helps you to make better financial decisions now and for the future.
With access to these things, you can better understand what you need financially, and the resources available to your company regarding its financing options. Simply knowing they are available will help you to make better financial decisions and go a long way to help you grow your business.
Do You Have No Idea How Much Money Your Company Will Generate over the Next Year?
You should stay on top of financial projections for your company because this allows you to plan accurately. It can tell you how many people you need to hire, what internal resources you will need to meet growth demands, whether your current suppliers and supply chain is sufficient, and if you need outside capital to fund your growth. Make sure that your financial department at your company is competent with expertise in financial planning as a core competency.
Having a great financial plan will also prepare you to give other departments clear and precise marching orders. It will also prepare them for any unforeseen changes that may occur. With everyone watching the projections, your team will notice if things go off track or beat expectations. You will then be able to make adjustments well in advance of any adverse or fast growth events occurring.
Do Your Costs Continually Go Up as You Earn More Revenue destroying Your Profits?
Are your revenues going up consistently every year but your profits are not because you have a difficult time containing costs? This is a common problem with businesses. It might be that your company is in a growth phase, and revenue is being ploughed back into growth areas. This is normal, but it must be managed well to make sure that the new money is being spent properly. If you are not growing fast, then you have a real issue that needs to be addressed head-on.
Work with your team to get costs down. This might mean hiring someone that focuses strictly on cost-cutting. Be sure however that you do not sacrifice quality when you cut costs. However, most companies find that there is lots of waste that can be cut without any company services, products and key departments are affected.
So get to work and save some money!