Tough Times checklist
With 2018 set to be another challenging year, here is our checklist for helping you to review your business to ensure it’s as strong as possible, especially from a cash flow perspective:
- Put extra effort into making sure your relationships with your better customers are solid.
- Review and flow chart the main processes in your business (e.g. sales processing, order fulfilment, shipping etc) and challenge their efficiencies.
- Encourage team members to suggest ways to streamline and simplify the processes (e.g. sit down and brainstorm about productivity, outsourcing and cost reduction).
- Review your budgets and set realistic and achievable targets. Use ‘bottom up’ budgeting where everyone in the office gives input on areas over which they have control – target a 10% cost saving.
- Review your realistic staffing needs over the next 12 months.
- Pull everyone together and explain the business strategy and get their buy-in.
- Get your members of staff involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
- If appropriate, review banking facilities and discuss future needs. If you are going to require additional funding ask for it at least 3 months before you need it.
- Establish your key performance indicators (KPI’s) and measure them on a weekly basis e.g.
- Sales leads generated
- Sales fulfilled
- Cash balance
- Stock turnover
- Debtor days
- Gross profit
- Net profit
- Get rid of won’t pay customers.
- Review debtors list and chase up overdue invoices. Offer existing debtors extended payment terms and/or discounts. Assign responsibility to one individual for invoicing and collections.
- Make sure your terms of business contain explicit payment terms.