Money, money, money. It’s all too often the topic of choice nowadays, certainly since the 2008 crash. Banks supposedly don’t have enough of it, small businesses want more but can’t access it, while big businesses have it but don’t like to part with it.
But as the old saying runs, money makes the world go round, and perhaps many of us have only really appreciated the true meaning of this turn of phrase post-crash, since when there’s been a lot less of it around. It’s why the issue of late and slow payment has become so high profile in recent years, with ‘cash flow’ the watchword for many small businesses.
Can’t manage your cash flow, can’t manage your business – this a line of thinking I’m only too aware of. As a former owner of printing business in the North West, I know just how crucial steady cash flow is, and how hard it can be to get certain customers to settle, on time, and in full. In the name of getting paid I’ve tried many tactics, including sit ins at the offices of customers with the promise of: “I’m not leaving until I’ve been paid!”
It shouldn’t be this way, but it often is, and the figures show the problem is getting worse, especially with the banks slashing lending to small businesses. Bridging loans and overdraft facilities SMEs once relied on to plug any gaps in their finances have in many cases vanished. And with it many firms have gone down the plug hole, unable to make ends meet.
It’s why I’m right behind the Forum’s latest initiative to help small firms manage their cash better with their free credit control bundle. It starts off in the right spirit too by being – as I’ve already mentioned – absolutely free.
Having read the entire three part guide it’s an excellent read and really useful to every small business owner. I know many printers who could make use of it.
The first section covers cash flow, and how best you as a business can manage it better. Simple tips such as how to negotiate a payment contract, working out your average payment times, and calculations explaining how to work out exactly how much late payment is costing your business.
The second guide is all about how to get your bank to agree to credit. This is all important these days, with the banks being particularly risk averse. How to prepare your business plan, knowing your facts, knowing your numbers, getting your forecasts right – all this is covered. What’s more, it’s actually been written by a serving bank manager who really know his stuff. This is insider knowledge anyone seeking credit simply has to take a look at.
The third and final section of the Forum’s guide is how to improve your credit history. This is linked to the latter section on accessing credit. Because one of the first things a bank will do on assessing a loan application or an overdraft request is look at your company’s credit rating. A naff rating invariably means the application’s in the bin pretty quickly.
If you want to access the Forum’s free, three part guide on credit management, simply click here. Did I mention it was free?
Former print firm owner Steve Swinyard talks about the importance of credit control.