How do I improve my net profit?

This depends on your business type, but common strategies include increasing revenue by raising prices or selling higher-margin products and reducing costs by cutting waste, optimizing efficiency, and using technology to increase output.

How do I increase leads?

More leads mean more opportunities to convert into customers. You can increase leads by driving website traffic, increasing foot traffic, promoting your business through social media and ads, targeting new markets, partnering with other businesses, or building an online distribution channel.

What are the new ways of online selling?

New selling methods include drop shipping, where you sell products without holding inventory, on-demand models like Uber or Lime Scooters, where customers pay only when needed, and sharing models like Airbnb, where businesses connect users to shared resources.

How do I reduce the risk of staff fraud?

Clearly define theft and dishonest behaviours in employment agreements. Set credit card limits, restrict authorization for orders, and minimize cash handling by encouraging online or mobile payments from customers.

What can I do about supply chain disruption?

Start by assessing potential risks at each step of your supply chain, prioritizing critical supplies that your business depends on. To manage disruptions, consider setting up alternative suppliers, forming resource-sharing agreements with similar businesses, removing at-risk products, and increasing stock for essential items.

Should I refinance to lower costs?

Refinancing can be beneficial if you can secure a lower interest rate. Consider talking to your banker or financial advisor about options like leveraging home equity or selling assets to refinance high-interest debt. Using personal funds to pay off business loans may offer long-term savings.

What is scaling?

Scaling is growing your business without a proportional increase in costs. For example, retailers can scale by selling online instead of opening physical stores. In software, serving additional customers costs little, as the product is digital, allowing you to expand with minimal added overhead, aside from potential increases in customer support.

What are the main issues when pricing?

Not understanding the full cost structure of your products or services, relying solely on competitors’ pricing, and competing purely on price or offering discounts without a clear strategy or justification.

What’s overtrading?

This occurs when your business grows too quickly and runs out of cash. This can happen if you take on new contracts, purchase inventory, or hire staff but experience delays in payments or supply deliveries, creating a mismatch between when you owe money and when you receive it.

What’s identity theft?

This occurs when someone uses your personal information without consent, such as your name, address, or bank details, to make unauthorized purchases or set up accounts. To protect yourself, avoid using public computers or Wi-Fi for sensitive transactions, create strong passwords, enable two-factor authentication, and keep your operating system updated.

What’s reputational risk?

It’s when negative public or media perceptions harm your business, often from customer reviews or social media comments, regardless of their truth. It can also arise from events beyond your control, such as a data breach, that damage your business’s reputation.

How do I speed up collecting money owed to me?

Consider switching to cash payments or offering shorter credit terms, such as seven days instead of 30. Encourage mobile and online payment options and request immediate payment once a job is completed or a product is delivered. You can also incentivize early payments or ask for deposits upfront.

What warning triggers should I monitor?

Create a red-flag system to alert you when something needs attention. Monitor key metrics like leads, orders, and sales that fall below a certain level, delayed sales, or losing a key customer. Other warning signs include declining profit margins, liquidity ratios, and stock levels. Regularly track your business’s performance using accounting software.

What should I do if the business is losing money?

Act quickly by assessing your burn rate, which are your monthly losses, and determining how long your cash reserves will last. Then take steps to extend your runway, such as cutting unnecessary costs, reducing staff hours, cancelling unused subscriptions, negotiating lower lease costs, selling excess stock or assets, and closing non-profitable business areas.

What’s the best way to increase cash reserves?

You can trade your way into building up a cash reserve by putting excess cash each month into a savings account. You can also access business loans, overdrafts or add in more of your own capital. If you need cash in a hurry, then look to see any unused assets, reduce overall stock or raw materials held, or reduce obsolete stock.

Should I lease or buy equipment?

If you have the cash and don’t need it for other needs, buying equipment is often the better option, as it allows for depreciation and can be more cost-effective than leasing. However, leasing may be better for fast-changing technology or expensive machinery, offering more flexibility, especially for seasonal demand or vehicles.

What’s the best way to finance working capital?

Ideally, you should fund working capital through your business operations. If that’s not possible, a bank loan can help bridge the gap until sales recover. The benefit of loans is that they don’t tie up existing working capital and credit lines. Loans should be structured according to the asset’s life, long-term for assets like buildings and short-term for assets with a shorter lifespan.

What’s the difference between debt capital and equity capital?

Debt capital involves borrowing money and incurring a debt, typically from sources like friends, family, or banks, often secured against property. Interest rates tend to be lower when using property as collateral. Another option is asset finance, where you borrow against the value of assets like inventory or work in progress.

Equity capital involves selling a stake in your business in exchange for cash. This is common with angel investors or venture capitalists who invest in promising businesses in exchange for ownership.

Where can I get a decent business plan template?

Download our free Business Plan Template here (Add link to your site).

Where can I get a decent cash flow forecast template?

We have a Cash Flow Template you can download here (Add link to your site).