why does there is a need to make a plan?
Your actions in business will affect it in a year, five years, or even ten years. That is why it is crucial to have a successful financial and commercial strategy plan. There without a, your company can stagnate rather than expand as you spend your efforts putting out flames and handling day-to-day activities without even really understanding the larger picture.
Say your goal is to boost sales by 30% over the following two years. How will you carry that out? You could need to raise prices or recruit more salesmen. All of these are covered by your financial strategy. And if expansion is your goal, you might need to make plans to buy commercial property. Even while you might not have the money to spend $1 million on an office facility right now, you can position your business to be able to get financing at a low rate in a few years with the correct cash flow planning and credit-building techniques.
1. Start your financial life off right by setting good habits
It's critical to position your new business from the outset for financial success if you recently found one. To keep your personal and business finances distinct, invest in the accounting system and open a business bank account.
Since you are a new company, you might not be eligible for all sorts of funding from banks and SBA lenders. As a result, focus on establishing your character by establishing and carefully utilising commercial credit cards.
2. Organise your payment policy
Clients that pay late might seriously affect your company's cash flow. Therefore, it's crucial to set a policy detailing the due dates for bills. Consider imposing a late fee or providing a rebate for early payment to encourage customers to pay on time and maintain your cash flow. Automate as much of your trade receivables operations as you can to make it simple for customers to make payments. You can get paid online without having to wait for a cheque to be mailed to you by accepting debit and credit card payments as well as bank transfers.
3. Financial Statements: An Overview
It may seem confusing and like your accountant should handle things like statements of cash flows, accounting records, and profit and loss statements but it's crucial that you, the business owner, comprehend your financial statements. The financial health of your company is depicted in these statements. It is possible to determine where your company is and where it is headed by looking at liabilities and assets working capital, or predicted sales. This allows you to decide whenever a course correction is necessary.
4. Choose the right financing option
If you need a cash infusion now or not, you never know when you might. In a few decades, you might want to buy another company, recruit more staff, or increase your marketing budget. Do not wait till then to look into your possibilities and identify the best small company loans or lines of credit available.