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Top Easter tips for small business

As small businesses start to emerge from the global financial crisis, keeping a close watch on cash flow and improving administration processes is the answer to growth and sustainability in 2010. The current environment is starting to offer more opportunities, so now is a good time for small businesses to re-focus on their finances and administration to ensure a healthy cash flow and prepare for the end of financial year.

Easter BusinessBibby Financial Services’ ten-point checklist below is designed to help small businesses get their houses in order over Easter, according to Greg Charlwood, Chief Executive – Asia Pacific, Bibby Financial Services.

1. Chase the Easter bunnies
Small businesses are still experiencing cash flow shortages as a result of the Christmas trading period. Send out invoices as soon as possible. If you don’t, you can’t expect to be paid on time. Be aware that payment settlement periods have increased recently and remain almost double standard trading terms, so ensure you are organised and follow up with debtors.

2. Count your eggs
Constantly manage your stock levels by ensuring you keep records and plan ahead because holding stock costs you money. One option is to speak to your current suppliers about more frequent deliveries so stock levels can be kept at a minimum.

3.  Don’t be a bunny
Very few people enjoy getting tough on credit control but it is vital to the success and survival of your business. With small business insolvencies still at historically high levels, bad debts pose a major risk to the business and its profitability, which may have a knock on effect on your ability to secure funding in the future. As a minimum, perform credit checks on new customers and set sensible credit limits.

4. Buy eggs in bulk at the best price
When it comes to managing your suppliers, remember to negotiate the best deal possible. You could get a better deal if you shop around and negotiate longer credit terms, and where possible take advantage of early settlement and volume discounts.

5. Start collecting your eggs
Cash flow is critical to a business’ success. Poor cash flow or access to credit is one of the main reasons for business failures. Without cash it is impossible to purchase raw materials, new equipment and – at the simplest level – pay staff wages and tax. Begin forecasting your cash flows and identify periods of shortages and look for ways to generate a healthy cash flow starting now.

6.  Don’t put your eggs in one basket
If you are stuck with a bank overdraft with a fixed limit that is repayable on demand, look at alternative methods of funding. Whilst lending to small businesses remains tight, there are lenders who are active. Debtor finance is an increasingly popular option of cash flow funding for small and medium sized businesses, which releases cash against unpaid invoices almost immediately. This injects cash back into the business quickly when required to help meet supplier invoices, pay taxes and wages and provide greater certainly for strategic planning and budgeting. What’s more, it does not require real estate security, making it one of the more accessible options for business owners.

7. Join the Easter egg hunt
Take the time to assess your market and look at what your competitors are doing. Consider the opportunities present in your market, while also looking at the threats. Hunt around for the best product developments, make positive changes to service and offer promotions. With the economy starting to show some positive signs, start to think about how you can position your business to take advantage of future growth.

8.  Start sorting out your tax return over the Easter break
Rather than waiting until the deadline looms, resolve to complete your return as soon as you can. To complete your return, your accountant will need full records of your financial transactions and why not get started now.

9. Treat your staff to a chocolate
Running a small business is a constant juggling act. Many are severely under-staffed, which means a lot of pressure is placed on existing staff. Thank those who work for you by buying them a nice Easter gift.

10. Lastly, sit back and enjoy a hot cross bun
Managing a small business can be tough work and often the owners and managing directors are over-worked and exhausted. Remember to take care of yourself and what better time to start than over the Easter break!

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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