8 tips for keeping your business financially sound

Use these tips to keep your business financially sound. Get started today. 

1. Keep track of how much breathing space you have financially 

One of the tools you use to keep a clear picture of your business situation, and to keep track of what funds you have, is a liquidity budget, You budget based on what you have in your account, how much you are earning, and what your costs are. That way, you will know if things are going to be tight in certain months, and when it will be possible to invest. Use the Future Check, which will give you more insights into your liquidity and tell you what the forecast is for the next 12 months. Would you like more insight into your finances? Watch the video on enhancing your understanding of finances, ‘Increase your financial insight’, and use the six tips it offers. English subtitles are available. 

2. Manage your debtors 

In tough economic times, customers are more likely to pay late or, in some cases, not at all. Debtors who are slow to pay or who do not pay at all eat up your time and punch a hole in your revenue stream. You want to avoid that. Agree on a payment term, or have your customer pay either half or everything in advance. Send timely reminders. If your customer still does not pay, send a demand for payment. 

3. Improve your cash flow 

Take a close look at your cash flow. Where do your various expenses and revenues come from? And when are payments debited from your account? Maybe the rent for the office is debited at the end of the month, whereas you get most of your income only at the beginning of the month. That is how you find yourself just a little tight every month. Look into whether you can adjust payments in the schedule for a better cash flow. 

4. Make sure you have a financial buffer 

It can always happen that your financial situation is not what you were hoping for. That is why you want to have a safety net. If things have been a bit sluggish of late, you will not be at your wits’ end. Find out how to get funds if needs be, such as an additional loan from family or friends. Make sure you have some savings, or look into various forms of financing. 

5. Maintain a good relationship with your bank 

A good relationship with your bank is very valuable. Being honest and open about your financial situation at all times helps you build a good rapport. If you need funding, it helps if you have always been open about the status of your business. After all, the bank prefers not to be surprised when it turns out that you have been struggling to keep your head above water. 

6. Take a close look at your revenue model 

Say your revenue model has been the same since the beginning of the business. Billing by the hour or the sale of merchandise, for example. If you are no longer taking in enough, take a closer look at your current revenue model and find out where the glitches are. In other words: future-proof your business. Are there opportunities to grow? Should you do some restructuring, or stop?

7. Make time for networking and finding new clients 

Always try to make room in your diary for networking and finding new clients. If you do this consistently and are visible, it will also bring in new clients. Make sure clients know how to find you, and actively seek them out too. 

8. Commit to online marketing 

How visible your business is depends on networking and finding new clients, but also in being findable online. Invest in online marketingBR. Make good use of SEO, so that you rise in the search engine rankings. Work on your visibility on various social media channels and update them actively. This way, your company will stand out to new customers. Also scour online marketplaces for assignments. Who knows what opportunities you might see there.