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 If
we were asked to nominate most crucial business control
we would simply say "cashflow". Without a device
to monitor cashflow a business is rudderless. An unexpected
negative cashflow could be likened to the onset of some
fatal disease. Nobody respects you, suppliers, lenders
or even customers. The latter go elsewhere, because you
can't afford adequate stock or employ quality staff top
provide service. It would probably be true to say that
most small businesses are undercapitalised from day one.
This potential time bomb is set off by a failure to monitor
and control cashflow. The initial shortfall in working
capital develops into a terminal cancer.
How often do your debtors parrot "We could pay you
if we could get paid ourselves". It's possible for
a business to end up in receivership while making a profit.
A profit is only an abstract expectation until sales become
cleared funds in the bank.
Is there a one size fits all solution? Bluntly there is
not. A constipated cashflow is a visible symptom of poor
or amateurish management. That's not to say a business
cannot be successfully established on a shoestring, but
the disciplined cashflow controls need to be in place
from day one. When you're flying on minimum fuel with
no reserves there is no margin for error.
A forcefully controlled business that is industry competent
will achieve a degree of success, even if its short on
working capital. More to the point, demonstrated cash
control following on from a whiff of sales success opens
the door to an enormous range of funding sources. Many
astute non bank lenders do NOT require security in the
form of real estate. Wealthy equity partners can be found
for businesses that are inherently profitable, but poorly
funded.
For example, Minder can arrange funding using the debtor's
ledger as security. You can receive an immediate cheque
for up to eighty percent of all your outstanding debtors.
For professional service providers such as an accountants,
surveyors, communications engineers etc., Minder can arrange
"Premium Fee Funding". The lender pays each
invoice in full within forty-eight hours of it being issued.
Minder also has connections with several venture capitalists
that are prepared to provide 100% funding to market a
truly innovative invention or business idea.
Going back to our earlier emphasis on being "controlled",
it is absolutely essential that adequate financial controls
be in place before an approach is made for funding. Lenders
will simply ignore a business that cannot produce an accurate
financial picture at any instant in time.
Again and again we see entrepreneurial business owners
crash their otherwise potentially million dollar businesses
because they genuinely did not understand the need for
or were incapable of exerting effective financial control.
Even the importance of prioritising payments from what
precious cash reserves they have escapes them. They simply
pay who yells the loudest rather than the supplier who's
truly crucial to their survival.
Minder provides practical down to earth cashflow control
systems customised to suit your particular business. We
provide user friendly software and comprehensive training
if required. Alternatively you can out source the entire
cashflow function to Minder. Our rates are surprisingly
low and all inclusive.
Contact us now and embark on a return to financial health. |
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