The majority of people make New Year’s resolutions in the hope of bettering themselves for the upcoming year; it could be things they want to achieve, habits they want to break or even goal setting. A business owner should also make resolutions for their company, as bad habits could creep in just as much as they do in your personal life. Here are our top 5 New Years’ business resolutions a business owner should make if they want to change the way their business is run for a more healthy system and cash flow.
- Get rid of dead wood.
Lots of business owners are afraid to cut badly performing customers from their client list in case they will never fill their spot with creditworthy ones. But the one thing to ask yourself is; are they really a customer or a debtor? By getting rid of customers that have prolonged payment to you, you are setting your business up for recovery in 2015 and getting rid of potential bad debt. You don’t need to leave your payments in the hands of a ropey payer, if you choose to continue to deal with them you are choosing uncertainty for your business, not only your business but for the businesses who you then supply. With a customer, warn them that their payment history is not satisfactory for your credit terms and unless they improve this you will not be in a position to do business with them or offer them credit.
- Credit check your customers online.
Once you have filtered through who you want to do business with, panic could well set in if you’ve ceased business with a chunk of customers. Don’t let this scare you, keep your standards up when looking into new customers and only deal with creditworthy ones. When you have a clean start, move forward equally as clean. Credit check your customers going forward and only deal with customers who have great payment history and payment behaviour traits.
Check their credit reports for;
- Payment behaviour
- Credit history
- CCJ information
- Director details
- Advisable credit limits
The information on a UK credit report can help you determine whether or not a customer is creditworthy enough to do business with and how much it is advised to invoice them. A Creditsafe credit report also shows you ‘Days Beyond Terms’ (DBT), which is the amount of days beyond the agreed terms it takes a customer to pay, compared to the industry average. This is a useful tool to consider when checking out a new potential customer or trader. Get your free trial of credit checking here.
- Pay off any debt.
Debt management is more difficult than it sounds, however the sooner you pay off and reduce bad debt the better chance you have of moving forward debt free. By paying off debt you’re also cutting your interest rates and saving yourself money for your business. Try to budget for repaying debt every month, but don’t make other areas in your business suffer for it. There are many resources that offer debt help if you are really struggling, or your bank could even advise you. Pay off what you can, and set up a direct debit to continue to make a dent in your debt, even if it’s a small one. Everyone has to start somewhere.
- Keep your bills and invoices organised.
By organising your bills and invoices to go out on time every month, you are being consistent to your customers, traders and suppliers. This will help them to get into a routine of paying you regularly. Make sure the invoices have no mistakes on them and are going to the right people; this will help remove any excuses as to why your customers aren’t paying you on time.
- Make sure you get paid on time.
After your invoices have been sent out, it’s a good idea to check they have reached who they are going to. Give your customer a call and check they have received your invoice and politely remind them they have a certain amount of time to pay it. Another tip is to accept all methods of payment, such as credit cards, cheques, direct debit etc. Also make it easy for your customers to pay you online via debit card or Pay Pal. The easier you make it for your customers to pay you the more likely they will.
Breaking personal New Years’ resolutions can be forgiven, however the same may not be said for your business. Stay on top of these resolutions and you should come out of 2015 with a healthier cash flow and a healthier business.