If there’s one thing a business can’t survive without, it’s cold, hard cash, and too much financial analysis’s cash-flow is the biggest indicator of a business’ health and viability. Unfortunately, many startups don’t manage their cash-flow properly, and as a result, 44% of new businesses find themselves close to closure by year 3. The first lesson; if your business is hemorrhaging cash, chucking more cash at it isn’t going to fix the situation – it’s just going to make a bigger mess. The trick is to figure out where in your supply chain the wound is and to close it. Follow your goodsThe faster you get your product or service to your consumer, the quicker your consumer will put cash in your hands. You need to look at the entire process, from the second you get the sale through to the moment the invoice is sent out.
An SME owner must know how much is being sold at any given minute. And yesterday. And how much is going to go out today, and this week. Every item that’s on the shelf is money sitting there unused, and turning that product into sales is what will get your business growing. The more accurate your sales predictions, the better you can minimize waste resources. Once your predictive modelling is sorted and your resource pipeline is as close to accurate as possible, your next focus is meeting the sales demand. What happens when a customer makes an order? If it is a long, manual process that delays customer receipt, how can you streamline it? Technology? Training? Or, most often a combination of the two? This also includes delivery. For physical goods, the cheapest form of transport is the slowest, in many instances meaning the cost of the delay is greater than the pennies saved. Remember, there’s more to a successful business than the pure profit margin.
0 Comments
Leave a Reply. |
AuthorHi, my name is Kos and I’m a serial entrepreneur. I know a lot of people out there can relate. Archives
February 2021
Categories |