Keeping on top of cashflow is one of the biggest challenges for small business owners. We know it’s a constant worry for start-ups and SMEs. In fact, recent research found that two-thirds of SME owners say it stops them sleeping at night…
SMEs routinely spend around half a full working day every week working on their capital management. It’s stressful, time-consuming and very important. Around a third of small businesses say that insufficient cash has been a barrier for their business growth.
Of these, around a quarter found they couldn’t invest in new technologies needed for their business, and almost the same number were prevented from opening a new office. It might seem daunting to deal with issues like this. At Turner Little, we know this doesn’t have to be the case.
Making small changes can make massive differences to SME owners and their cashflow. We’ve come up with three ways you can take control and in turn allow you to devote more time to the growth of your business.
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Fully embrace new technology
A simple way to generate more revenue as quickly and as simply as possible is to engage with the latest payment and financial technology. It’s estimated that one in ten transactions involving small businesses are abandoned because the customer struggles to pay in the best way for them. This is currently estimated to be costing small business owners around £8.7 billion a year in lost sales.
Use innovations such as contactless credit card payments, and the multitude of online payment options now available. This will stop customers becoming frustrated and abandoning doing business with you because of outdated payment methods. It’s a good way to generate repeat customers too – the easier it is for consumers, the more likely they are to come back again and again.
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Get expenses under control
Any unexpected expense can cause major problems in terms of cashflow for small businesses. Don’t let these spiral out of control. For example, late or forgotten expense claims from employees that must be honoured can present real problems when handling working capital. This is particularly the case for many small businesses as they’re less likely to have an automated expense management system.
Gaining control of this kind of spending can give you a solution. You could consider using a corporate card that sets limits on spending, for example. These can be set to only work in specific countries for specific transactions. This can also help track spending and provide your company with a statement that can be audited.
You must keep track of what your employees are spending, and a system like this will allow you to see it in real time. Having this information will therefore allow steps to be taken should there be any problems visible.
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Build meaningful relationships with suppliers
Paying by credit card can ensure you are always meeting payment deadlines for your suppliers, even when you don’t have cash readily available. This is the kind of business decision that helps your business in the long term as you build up trust with long-term supplier relationships.
Using a credit card or an online bank transfer system gives small businesses flexibility. Meeting payment deadlines early will also improve relations and may lead to lower prices later on. Credit cards also have the advantage of freeing up capital for unexpected purchases, such as buying new ingredients if applicable, or employing extra staff.
All small business owners are faced with myriad priorities and usually a small staff. In these circumstances it’s easy to keep postponing sorting out cashflow, but devoting time in the right way should be seen as a key investment in the future success of the business.
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.
