Tough Times Check List
Author – Jerry Davison, Managing Director, SouthWestfd
With 2013 set to be another chall
enging 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:
- Review your budgets and set realistic and achievable targets.
- Get rid of won’t pay customers.
- Review debtors list and chase up overdue invoices.
- Offer existing debtors extended payment terms and/or discounts.
- Make sure your terms of business contain explicit payment terms.
- Assign responsibility to one individual for invoicing and collections.
- 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!
- 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 processes (e.g. sit down and brainstorm about productivity, outsourcing and cost reduction).
- 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 staffing needs over the next 12 months and make weak or unnecessary individuals redundant now.
- 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.
- Establish your key performance indicators (KPI’s) and measure them on a weekly basis e.g:
- Sales Leads generated
- Orders supplied/fulfilled
- Cash balance
- Stock Turnover
- Debtor Days
- Gross Profit
- Net Profit
- Pull everyone together and explain the business strategy and get their buy-in.