It’s a New Year and a new start… is 2015 the year to clean up and improve your business?
Here are our 5 top business tips on how to establish a healthier, more financially attractive business this year.
Business owners will know more than anyone how difficult it can sometimes be to keep on top of their finances, especially if they’re a start-up company or an SME. For a business to be deemed as creditworthy, it needs to have a decent cash flow, good payment behaviour and a good credit limit. Insolvencies happen every day in every industry, and the most common reason for this is a lack of cash flow. Cash flow is the blood stream of any business and you will struggle if you do not maintain a good one. Improving your cash flow will ultimately improve your business, making you bigger and better in 2015.
Here are our 5 top tips on ways to make your business more financially attractive.
1. To start, get a free business credit report
Your credit report is basically your business passport in the financial world; it’s a solid identification of your business that lenders can check to see if you’re telling the truth in negotiations. When trading, some companies will even check this before meeting you, so it’s essential that it’s looking its very best. Look for areas of improvement, make plans and implement them. By dedicating time to boost your credit rating your credit report won’t only look better; your business should also become stronger. Get a free business report on any UK company with Creditsafe.
2. If your business is in debt, start paying off as much as you can
If you do have overdue bills and can’t afford to pay them off, try to break the cycle. It’s not only the amount of money you owe that will be on your credit report; it’s also the amount of invoices that are outstanding. If a supplier looks at your business and see lots of outstanding debts, they may not be prepared to take the chance of trading with you. So even if it’s a small amount to pay, it will still cut down the number of debts you owe. Always pay off any debt that is overdue, preferably prioritising the most urgent ones.
3. Make sure all bills are on time going forward
Setting up direct debits is a helpful way of paying bills on time every month. If you can’t afford your current terms, call your provider and ask to renegotiate. Set up something that you know you can afford to pay every month and set up a direct debit to do so automatically. This will ensure you are not missing a deadline, even if you’re only paying the minimum amount. A constant up to date payment pattern will reflect positively on your business and in the payment history section of your credit report.
4. Check out potential customers and monitor existing ones
To protect your business, you need to ensure that you don’t deal with customers who can’t pay you. This could have a ripple effect and you may end up not being able to pay your bills, resulting in your business suffering. Even if you have long-term relationships with customers and have had no problems with them in the past, or work with customers who seem too big to fail, the recession has shown us all how circumstances can quickly change. Monitor your customers, and keep on top of their payment history. A favourite tool among Creditsafe customers is Risk Tracker, this allows you to select a company to monitor and the system does it for you, emailing you with updates if that company’s status changes. Don’t gamble your business on companies you haven’t checked out.
5. Target the right people
When you’re happy with your strengthening business and want to target more people for new business, make sure you target the right people. Targeting the wrong people can be more damaging than not targeting anyone. Creditsafe offer a tool called Marketing Prospects, put your search criteria in the system and it will give you a data list of people to target. This is a helpful tool when looking for a specific market in particular.