Are Money Problems Stunting Your Business Growth?

Jan 22, 2016 Blog  Entrepreneur , RainFin , SME
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If you run a business you’ll know how frustrating it is to pass up opportunities because you aren’t in the right position to capitalise on them.

Sometimes, even if you’re running a profitable business you might still find yourself unable to make those hires, purchases or investments that would take your business to the next level.

There are a number of reasons you might be finding yourself struggling by the end of the month, but how do you get yourself out of the cycle?

Do you have a cashflow problem?

Your business is showing great profit margins – you’re making money! So, why do you regularly find yourself struggling to make ends meet?

Well, although profitability is a great asset, when you measure it you are only looking at your income against your expenses at one particular time. There may be days, weeks or months that – as you await payment from a client, or are working on a job, or waiting to shift stock – your outgoings exceed your income.

You might make a profit by the end of the year, but if your cashflow problems mean you can’t pay your rent – this could put you out of business.

It’s important to look at profit and cashflow in tandem; and to do this you will need to have a strong hold over your finances. Here are the essential documents to compile:

– A business plan. If you’ve made it this far without one, congratulations. It’s time to make one. This will help you guide and manage your business growth.

– A cashflow statement and a cashflow forecast. These will help you understand and manage your businesses financial patterns.

– A profit and loss statement. These gives you a long-term overview of your businesses profitability.

These documents will all give you a clearer understanding of your balance sheet. And being able to analyse your figures will help you plan for the future.

Are Money Problems Stunting Your Business Growth?

Are you working efficiently?

As a business owner you know what it takes to keep your customers happy. If you’re lucky, they’ll keep coming back to you.

But do you find it difficult to acquire new customers, as you deal with your existing orders?
While it’s fantastic to have a steady stream of work, to keep your business alive in the long-run, you will need to grow. If all of your resources are occupied in your existing projects you will need to find a more efficient way of working to give yourself time and space to acquire new business.

While it’s fantastic to have a steady stream of work, to keep your business alive in the long-run, you will need to grow. If all of your resources are occupied in your existing projects you will need to find a more efficient way of working to give yourself time and space to acquire new business.

Although hiring new staff, or paying for new tools and equipment to help your business run more efficiently usually involves an initial injection of money, this will often pay for itself over time. Doing a cost-benefit analysis will help you understand and evaluate whether taking on some short-term debt will help your long-term financial position.

If you need help deciding whether making a big purchase for your business, this helpful guide could give you a few tips.

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Do you need an injection of cash?

Whether you have a cashflow problem, or are simply missing opportunities for growth because you cannot afford to expand – it’s important to consider your options.

There are plenty of ways of funding small businesses – but consider your financial options carefully.

If you’re interested in finding out more about how RainFin could help support your business growth, sign-up to RainFin today.

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