This year is shaping up as yet another difficult one for SMBs, but there are a few easy ways to stay ahead of the game and avoid the roads that lead to insolvency.
According to RSM Bird Cameron, there are ten things businesses can do now to improve profit, cashflow and reduce stress levels going into 2012.
“Some businesses have already started the New Year with cashflow difficulties as the cash cycle has tightened considerably through December and January. Now is the time for business owners to consider opportunities to restructure their business in light of what’s not working for them,” RSM national head of business solutions Andrew Graham said.
Follow these tips to get in the best possible shape for the year ahead:
1. Review the products and services you sell and tailor the mix to appeal to changing customer needs for 2012. Start considering and planning for other times in the year when customer needs change, for example Easter and change in seasons.
2. Review pricing structures to ensure competitiveness and profitability. Put formal procedures in place to monitor and proactively respond to competitor pricing changes.
3. Review stock levels to make sure you can satisfy customer demand for profitable product and service lines, and identify slow moving stock that can be liquidated as “bargain buys”.
4. Review sales, marketing and promotion plans and make sure they are optimised to help achieve the best results throughout 2012. Ensure all staff are aware of the targets for each week and be proactive in addressing shortfalls.
5. Review staffing plans and confirm acceptance of the rosters by all staff. For non-retail businesses, aim to schedule annual leave plans for the year as early as possible to ensure the business continues to operate effectively all year round.
6. Review fraud and theft protection systems and ensure all staff are reminded of their responsibility to be vigilant at all times.
7. Review debtor lists frequently and regularly and actively chase all overdue accounts.
8. Review the use of finance products for effectiveness. Overdrafts, premium funding, lease facilities and cashflow funding products can all be excellent tools to help match a business’s cash flow with planned outlays.
9. Complete a GST health check. Small businesses are in danger of losing time and money because of unreliable or outdated business systems causing them to incorrectly report GST.
10. Remember that you deserve to enjoy a break as well and it is vital that you are able to operate well. Plan some time off during slower periods throughout the year so that you are well rested and enthusiastic in the busier periods. Take care of your health and enjoy downtime with family and friends during the year.