Take a step back and assess your business as it is today

What aspects of your business plan are no longer viable? In what ways can you adjust it to better fit the current market and customer needs? Ask yourself questions such as:

– Is my product still relevant in today’s economy?

– Are my pricing strategies competitive with other similar businesses?

– Have I identified new target markets or customer segments to expand into?

– Have I taken advantage of the latest technologies and trends?

– Are my marketing strategies up to date with current trends?

Evaluate what has and hasn’t been working over the past few years

Take a look at the successes and failures of past projects, initiatives, and campaigns. What worked? What didn’t? Identify areas that need more attention or could use improvement. Pay close attention to any changes in customer needs, competitor offerings, technological developments, and industry trends—these can all have an impact on your business plan.

Brainstorm new ideas and strategies for reviving your business plan

Now that you’ve assessed the current state of your business, it’s time to brainstorm some strategies for reviving your outdated business plan. Think about different ways you can use technology, marketing tactics, or other resources to stay competitive.

Draft a new business plan that focuses on your strengths and areas of improvement

Once you’ve identified potential strategies for reviving your business plan, it’s time to create a new one. Make sure that the plan takes into account any changes in customer needs, industry trends, and technological developments.

When drafting your new business plan, evaluate your strengths and weaknesses. Identify what you do well and what areas need improvement or adjustment. Think about how you can use these to create a competitive advantage for your business.

Implement your new business plan and measure its success. Monitor the results of your strategies and make adjustments as needed. Keep in mind that a successful plan requires consistency, dedication, and patience.

Create achievable goals for the next five years

When reviving your business plan, it’s important to set realistic and achievable goals for the next five years. Consider what areas of your business need improvement or development, then determine how you can get there in a reasonable amount of time. Additionally, look at current economic conditions and industry trends to better anticipate what may be needed for success in the future. For example, if the industry is shifting to become more digitally focused, then you may need to create a digital strategy for your business in order to remain competitive. Set goals that are specific, measurable, attainable, relevant and timely (SMART) in order to make sure your five-year plan is successful. By setting SMART goals now, you will be better prepared to take your business to the next level in the coming years.

Additionally, it’s important to set regular milestones and review points so that you can track your progress over time. This allows you to adjust your goals as needed if changes arise unexpectedly, or to celebrate successes along the way. Knowing what needs to be accomplished and when will help you to stay focused and motivated, while also ensuring that your five-year plan is successful.

Implement changes slowly so you can track progress accurately

You should always make changes to your business plan slowly and track progress accurately in order for you can tell which strategies are working. Additionally, it will give the opportunity adjust or refine new plans as needed-a process that’s essential when creating any type of document. As time progresses, you’ll be able to grow your business more efficiently and effectively.

When making changes in your business plan, it’s important to consider the potential impact on other areas of your business. For example, if you decide to expand into a new market or increase spending in certain areas, how will that affect customer service, employee morale, or other factors. Evaluating these areas can help you make sure that the new plan won’t cause unintended consequences.

Finally, once your plan is in place and you’ve made all the necessary changes, it’s important to review and update it regularly. This will help you stay on top of any changes to the market, trends in your industry, or other external factors that can affect your business. By revisiting and revising your plan on a regular basis, you can ensure that it will stay effective in the long run.

Celebrate your successes along the way!

Reviving your business plan can be a daunting task, so don’t forget to reward yourself and celebrate successes along the way. This will help keep you motivated and inspired to keep pushing forward. Make sure you take a moment to recognize the progress you’ve made and pat yourself on the back. You may even find it helpful to create a timeline, so you can track your progress and have a visual reminder of how far you’ve come. Celebrating successes can be as simple as taking yourself out for a coffee or treating yourself to a nice dinner. Whatever works best for you, make sure you take some time to enjoy the small victories as you work towards your ultimate goal.

With the right approach and dedication, reviving your outdated business plan in 2023 can be an exciting opportunity for growth. By following the strategies outlined in this blog post, you can ensure that your business plan remains relevant and competitive for years to come.

CLICK HERE TO GET A FREE QUOTE

The post How to Revive Your Business Plan in 2023 first appeared on Bizzloans Australia.

What is a supply chain disruption and why do they occur?

A supply chain disruption is any event that prevents or delays the flow of goods and materials throughout the supply chain. Disruptions can occur at any stage of the supply chain, from production to delivery, and can be caused by a variety of factors, including weather, accidents, political instability, and natural disasters.

While disruptions are often out of our control, there are some steps that small businesses can take to minimize the impact of a supply chain disruption.

How can you identify if your business has been impacted by a supply chain disruption?

There are a few signs that may indicate your business has been impacted by a supply chain disruption:

• You receive fewer orders than usual
• Orders are delayed
• Inventory levels are low
• You receive damaged goods
• Customers are complaining

If you notice any of these signs, it’s important to take action right away. The sooner you can identify the problem, the easier it will be to fix.

What are some steps you can take to mitigate the effects of a supply chain disruption

1. Try to anticipate disruptions before they happen.

This can be difficult, but it is important to do your best. Look at your supply chain and identify any potential points of failure. These are the places where a disruption is most likely to occur. For each potential point of failure, brainstorm some possible solutions. For example, if you rely on a single supplier for a critical part, what would happen if that supplier went out of business? Could you find another supplier? Would you be able to make the part yourself?

Disruptions can come from many different sources, so it is important to be as prepared as possible. By identifying potential points of failure and brainstorming solutions, you can be ready for anything that comes your way.

2. Put together a plan for how you will respond to a disruption when it does occur.

This plan should include who will be responsible for each task, how you will communicate with your employees and customers, and what steps you will take to minimize the impact of the disruption.

When business is disrupted, it can be difficult to know what to do next. However, having a plan in place will help you to stay organized and focused on your goals. Here are some tips for creating a disruption plan:

Assign roles and responsibilities.

When business is disrupted, it is important to have a clear plan for who will be responsible for what tasks. This will help to ensure that everyone knows their role and can work together to minimize the impact of the disruption. Train your employees on what to do in case of a disruption and make sure that they understand the importance of following the plan.

Communicate with your employees and customers.

It is important to keep your employees and customers informed during a business disruption. Use clear and concise communication to let them know what is happening and how it will affect them. Be sure to communicate early and often. Use multiple channels of communication, such as email, text, social media, and your website. Keep your messages updated as the situation changes.

If you have employees who work remotely, make sure they have the information they need to stay productive. If possible, provide them with alternate work locations or arrangements.

Finally, remember to communicate with your suppliers and other business partners. Keep them updated on the status of your operations and any changes that may affect them. This will help mitigate the effects of a supply chain disruption. Effective communication is essential during a business disruption.

Take steps to minimize the impact of the disruption.

There are several steps you can take to reduce the impact of a business disruption. For example, you may need to temporarily close your business or change your hours of operation. You should also have a plan for how you will maintain customer service during the disruption.

Creating a business disruption plan can help to minimize the impact of an unexpected event. By having a plan in place, you can keep your business running smoothly and ensure that your employees and customers are taken care of.

3. Review your plan regularly and make changes as needed.

This will help ensure that you are prepared for any future disruptions that may occur. Disruptions can happen at any time, so it is important to be prepared. Reviewing and updating your plan regularly will also help you to identify any potential weaknesses in your supply chain so that you can address them before they cause problems. By preparing for the unexpected, you can keep your business running smoothly, no matter what.

4. Be flexible and adaptable.

The best-laid plans often go awry, so it is important to be flexible and adaptable when disruptions occur. For example, you may need to change your suppliers or find new sources of inventory. You may also need to adjust your prices or offer different products and services. Disruptions can be frustrating, but by being flexible and adaptable, you can minimize the impact of supply chain disruptions on your small business

How can you get back to business as usual after a disruptive event?

The first step is to assess the damage. This includes looking at how your supply chain was disrupted and what the impact was on your business. Once you have a clear understanding of the situation, you can start to develop a plan for getting back to business as usual.

This plan should include steps such as identifying alternative suppliers, developing new processes, and implementing new technology. It is also important to create a communication plan so that you can keep your customers and employees up-to-date on the latest information.

As a business owner, you know that your company’s success depends on many factors – including the strength of your supply chain. Disruptions to your supply chain can have a major impact on your business, so it’s important to be prepared.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post How to Manage Supply Chain Disruptions for Small Businesses first appeared on Bizzloans Australia.

Let’s first dive into the details as to what a Cash Flow Forecast is. A business cash flow forecast is a business document or part of a business plan where it estimates the amount of money a business could bring into their everyday transactions, and how much they are expecting to spend on their everyday expenses as well. It is a document that includes all of a business’ forecasted income and expenses and is usually itemised. A cash flow forecast usually takes into consideration the next 12 months, but it can also only look ahead up to a few weeks or even just a few months, depending on how and why the business needs it.

So why is this important? This is because the cash flow forecast of a business acts as a sort of warning system, much like how weather can be forecasted, a business can also look forward to its expected cash flow for the next few months based on an analysis of several details that come from a business’ day to day transactions.

 A business’ cash flow forecast will also track how fast or how slow a business’ customers are paying their credits or invoices. For businesses that involve wholesales, this is something that is important due to the fact that most wholesale businesses depend on the profits of their orders, making on time payments, very much important. 

A cash flow forecast will also tell any business owner if their business will have enough cash to be able to expand their business. The business owner can also expect that the forecast will also tell them how much cash is needed to keep the business running. It will also be able to show a business owner if and when there is more cash going out of their business than cash going in.

And lastly, while we may not have been able to give every reason why a cash flow forecast is important, a cash flow forecast can be used to find cycles in payment or trends that are seasonal in order to be able to find or pinpoint moments in a business calendar year when a business may need additional cash for the daily expenses and payments a business goes thru. This can help any business be able to plan ahead and make sure that it always has money to cover such expenses or payments.

With all that being said, and most bases of why a business needs a cash flow forecast almost covered, let’s head on to how a business can make and ensure that its cash flow forecast is correctly done.

STEP 1: Estimation of a business’ income in a specific period of time

Any business looking to make their business cash flow forecast should take a look at their sales over the last 2 to 3 years. They can then use this as their basis for their calculations in their cash flow forecast.

Remember that not all sales and income patterns will be the same, this means that there should be other factors that should be considered when you’re making your forecast. The holiday seasons, your marketing campaigns, trade shows, events, and even new product launches should be considered.

A business’ next step should be to have an estimation of the amount of money that they are expecting to earn over that particular period, keeping in mind all of the factors that will and can come into play. This also includes loans and investments that a business is going to get or is expected to get.

While past sales records are important, a business can still make predictions based on a survey of your customers needs and purchase requirements along with their intentions of purchase especially if the business does not have access to any previous financial records or reports. This way the business will have an idea how much money will be coming into the business.

 STEP 2: Know when you’re getting paid

A business should know when it is going to get paid in order to know if they will have enough money for the upcoming days, weeks, or months. For businesses that are not retailers, this is extremely important because money doesn’t come at a regular basis, which means a business needs to consider the terms of payment to be able to procure an accurate cash flow and be able to set it against any outgoing money.

STEP 3: Know your expenses

One important column in your cash flow forecast should be your expenses. This should be a very detailed column as it will determine whether or not a business has any shortages for the upcoming days, weeks, or even months. This in turn will allow a business to estimate the bills they would have to pay and decide on their day to day costs.

There are a lot of expenses that are already fixed for a business that they must ensure are in their expenses column, and some of these may be:

• Rent
• Materials (Raw / Processed)
• Assets
• Salaries
• Loans, fees, and other charges
• Taxes
• Marketing and advertising expenses

STEP 4: Compiling and Working out your Cash Flow Forecast

The next step is to compile the Cash Flow Forecast with the business details collected from the above steps. Subtract the business’ net expenses or outgoings from the business’ net income which will give the business either a positive or negative figure. If your cash flow forecast results in a positive figure, this means that the business has more cash coming into it than what it is spending on expenses. Similarly, when it is a negative figure, this means that the business is spending more money than what it is earning.

The business then has the option to keep an eye out on the running total of the cash flow forecast, from weeks to even months, in order to get a clear picture of the business’ cash flow forecast for the business in the upcoming months; a lot of negative weeks can mean that the business is in trouble and it needs a lot of forward planning in order to meet commitments. Equally, positive weeks can mean that the business can either choose to expand or invest in some other aspect of the business. 

STEP 5: Finalize the budget and adjust as needed

The main goal of a business in order to make a Cash Flow Forecast is to ensure that the business is making smart decisions when it comes to their expenditures. This means that with the completion of the business’ cash flow forecast, a business will be able to make smart decisions on where to invest or expand in the business, or if it needs to double up on its effort to make sure that there is an increase in the cash that comes into the business.

A business will be able to make its annual budget in a more efficient way when it is partnered with an updated Cash Flow Forecast. And while the 5 steps above are a sure fire way to make a Cash Flow Forecast here are a few things you can keep in mind when making one as well:

It is always best to make a cash flow forecast that looks ahead a minimum of 13 weeks. Those 13 weeks into the future is for the reason that most businesses do not and will not have enough financial capabilities to survive a cash flow crisis (when there is no money entering the business), be it short term or long term. On the other hand, six months minimum should be the cash flow forecast prepared, and for really large businesses, an annual cash flow forecast should suffice for the business.

Remember that a business should always choose the simplest of cash flow forecasts. It does not need to be that fancy, as the data in a business document like this one will be read by various people in the company, meaning, the more simple it is to understand, the better key staff members will be able to tackle all of the things needed to be done in order to improve or maintain, a business’ cash flow.

And finally, a business must always remember to share their cash flow to key staff members who can help achieve the goals that a business needs to achieve or what a business aims to do or implement in order to fix or correct the flow of income into the business

A business’ success can lie in successfully being able to find a balance between profit making and being able to effectively manage cash flow. Hence, Cash flow management is the center of any success of a business, and making a cash flow forecast is the key to having the best cash flow management in any business.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post 5 Easy Steps to Prepare a Cash Flow Forecast first appeared on Bizzloans Australia.

Definition of Inventory

In business accounting, inventory is the goods or products that the business handles with the intention of selling them for profit. Inventory may be tangible or intangible. Tangible inventory may be raw materials used to manufacture the goods to be sold by the business or ready-made products that are procured from suppliers or vendors, also with the intention of selling them for financial returns for the business. If you are selling software, licenses, or other similar goods, are classified as intangible inventory.

Types/Classification of Inventory

It is important to know the types or classifications of inventory to be able to make sound financial and production planning decisions for the operations of the business. Knowing the type of inventory is also important in coming up with a solid inventory management and inventory control procedures for the business.

1. Inventory in Retail/Merchandising Business

These are the goods that are ready to use and sell to customers for a profit. In your business’s financial statements, particularly your current assets, this would just appear as “Merchandise Inventory” or simply “Inventory” in your books of accounts.

2. Inventory for Manufacturing Business

For businesses who manufacture goods for retail or sale to merchandising businesses, you would typically have  three more types under this umbrella category of inventory and all of which are reported in the current assets section of the business’s balance sheet at the end of an accounting period.

Raw Materials Inventory. This is the basic cost of the material that you are going to process and convert into a product or the final finished goods. Example: Steel – for roof manufacturers or car manufacturers. Wood – for pieces of furniture.

Work-in-Process Inventory. These are the unfinished units at the end of an accounting period.

Finished Goods Inventory. These would be the completed units of manufactured goods but are yet to be sold.

Some manufacturing companies maintain a fourth inventory account in their books and that would be the Manufacturing or Factory Supplies Inventory Account used to account for the basic raw materials that are to be processed but are not necessarily essential in the manufacturing of a certain product. As with the three other inventory accounts above, this is also reported in the balance sheet of the business at the end of the accounting period.  Examples of which may be glue, packaging materials, nails, and other similar items.

3. Maintenance, Repair, and Operating (MRO) Goods

This is the third type of inventory that may or may not be included in the books of accounts. This is simply the inventory that the business has in support of the manufacturing process.

Inventory Management

Simply put, inventory management tracks and controls all stocks from the moment you purchase them from your suppliers, placing them into your warehouse, and eventually selling them to your customers. Inventory management is the foundation and a fundamental aspect that a well-functioning business must have, especially if you are aiming for success and a secured place in the world of retail business.

Five Stages of the Inventory Management Process

1. Purchasing

This simply means purchasing needed materials for the production or manufacturing of your goods to be sold or purchasing the ready-made goods or merchandise from your suppliers or vendors for sale to your existing and new customers.

2. Production

Creating your products to be sold from your raw materials and/or component parts. This is only for businesses involved in manufacturing products and goods. Merchandisers and wholesalers normally skip this step but is essential with businesses involved in manufacturing.

3. Holding Stock

This usually involves storing your raw materials before manufacturing (if and as required) and your finished goods or ready-made goods before they are sold.

4. Sales

Being able to sell your stocks or goods to your customers and having them pay promptly for it.

5. Reporting

The reports from a particular accounting period or at the end of it would keep business owners up to date and up to their toes when it comes to sales or lack of it. Inventory reports are needed in order to check if the business is making or losing money or what should be addressed if the reports would yield concerns and findings.

Inventory Control

Basically, inventory control is the process by which a business manages its stocks in storage. What it involves is knowing how much you have available, where it is located, and the conditions of your stocks in hand. Inventory control is also about being able to put your stocks properly and efficiently in storage because even this aspect has an impact on inventory costs. The time you spend controlling and counting is also a determining factor with regard to inventory costs as well.

Inventory Management versus Inventory Control

Both concepts are important and look similar. However, the takeaway here is that inventory control is a key part of inventory management.

Importance of Inventory Management

Inventory management is essential in ensuring that you can run effectively and efficiently your business, that you know how to handle your customers and their demands, and that you are meeting your targets when it comes to sales and income for the business.

1. Ensure smooth business operations

Having a good and solid inventory management system or plan ensures that you will be able to run your business smoothly and efficiently. Inventory management is crucial to business operations so it will not crumble or fall apart.

A business owner needs to keep in mind the following aspects of this benefit of having a working and efficient inventory management system:

• The business owner and its warehouse staff should know and be able to know how to match their product supplies to the customers’ demands
• When you know the effects of having stock outs or out-of-stock situations, there is already a contingency plan in place to avoid this. Having a proper supply and demand forecast for business operations would help avoid these situations.
• Know when to implement changes, if needed, to inventory controls that are in place if the situation is not working out well for the business.

2. Keeping your customers happy

Keeping your customers satisfied, happy, and loyal also entails having enough stocks of the products that you are offering to them. At any given period in the course of business operations and financial reports generated from the inventory that you have, inventory managers and controllers should already know the trends and seasons that have a great effect on the products offered to your customers and to the business’s sales and income as well. Knowing that you have enough stocks, you can replenish fast moving items on time, knowing which products should be re-evaluated for failure to rake in sales, recommending possible changes in purchases, all have an effect in keeping your customers happy. Inventory controllers and managers should not just focus on keeping stocks effectively and efficiently moving, they should also work together with marketing and business development to weed out products that are not helpful in generating sales and probably replace them with ones that would.

3. Growing your company with inventory management

Inventory management helps companies to grow by also being able to identify suppliers and vendors that work well together with your business’s inventory schedule and marketing and sales targets. Are your suppliers able to meet your demands? Do they have other products that could well be worth being placed in your target market? Will your current and succeeding inventory purchases help grow your business in terms of sales and income? Inventory management should not just be concentrated in ensuring that stocks are available. It can also help grow and branch your business out to other ventures that will be beneficial in the long run.

Latest Inventory Management Techniques

Just like in any other business aspect, procurement, supply chain management, logistics, and inventory management have come a long way from how they started. These business concepts have been integral in any business and being knowledgeable and up to date about the latest trends and developments is vital to ensure that your business will be at par with the changing times.

A significant increase in e-commerce businesses have paved the way for a change in inventory management techniques. Although the most common inventory management techniques are still being employed by traditional businesses, it is not wrong to introduce new and updated concepts especially if it could help the business operations run smoothly and efficiently. Mixing these techniques may be a trial-and-error process but once you are able to strike a good balance, it could put your business in a much better position in terms of market share and income to your business operations.

1. Just-in-Time Inventory (JIT)

This inventory management technique involves just the right amount or as little stock as possible to mitigate costs and risks involved in keeping a large number of stocks in your warehouse on hand. This inventory management technique allows companies to just order what they need in consideration of their production volume and allows them to fully utilize every raw material and component with minimal wastage and losses.

This inventory management system is preferred by some of the biggest manufacturers in the world such as Dell Computers and Toyota. Inventory is simply ordered and shipped as and when needed. As we are well aware of, inflation rates and other economic factors dynamically have an effect on these industries, so it is wise to be on the safer side and apply a more conservative approach in terms of manufacturing, stocking, and shipping of these types of items.

2. Dropshipping

You may have heard of this term especially to those who are engaged in e-commerce businesses or those who are online retailers. Simply put, businesses who employ this inventory management technique are outsourcing all aspects of managing their stocks or goods. It is currently one of the more popular inventory management techniques and solutions for businesses who would not want to deal with supply chain, inventory control, and logistics concerns. For one, this is beneficial especially to those businesses who have limited space in which they can place their goods. Dropshipping partners send out regular reports to the business owner as to the status of their goods thereby helping the business identify “problematic” items and items that are fast moving and are essential in the generation of sales for the business.

Dropshipping allows the online retailers or e-commerce businesses to focus their efforts, capital, and resources on the business’s marketing and sales platforms to gain more customers and reach their targeted sales for the period.

One of the drawbacks of dropshipping would be having to rely so much on the outsourced service that may compromise the quality of your goods for sale. It is important that the business owner must still assign one or two key personnel to ensure that the required standards are met and that the dropshipping partner is also employing inventory management and controls that are acceptable and at par with the standards agreed upon.

Also, transacting in bulk using drop shipping partners or services may seem like the business is saving a lot in terms of cost. A business owner should consider looking into its profit margins because since one is still dealing with transactions at a retail level, the profit margin may get eaten up by costs charged by dropshipping partners. In terms of customer service, the business owner still bears customer service-related concerns and complaints that may be brought about by mishandling of packages and products by the dropshipping partner.

3. Safety Stock

This is an inventory management technique used to prevent stockouts due to incorrect or inaccurate forecasting and unforeseen circumstances that are sometimes beyond the control of the business owner. Extra inventory is ordered beyond what is the current demand.

Also known as buffer stock, this inventory management technique is used to allow businesses to have enough in cases when the demand is high, and the suppliers will not be able to meet the demand at that certain instance. It is important for businesses, especially with fast moving items, to regularly have a safety stock in hand to ensure customer satisfaction and meet their demands at any given time.

4. First-In, First-Out/Last-In, First-Out (FiFO/LIFO)

This is one of the most conventional inventory management techniques known to businesses. These are basic methods used to calculate the cost of goods sold by the companies.

First-In, First-Out simply means that stocks that arrived and were stored first should go out first. With Last-In, First-Out, stocks that arrived and were stored last should be the stocks that need to go first.

The oldest inventory goes out first in the FIFO system and the newer inventory (LIFO) is prioritized in this inventory management technique. FIFO keeps your inventory fresh while LIFO prevents your stocks or inventory from going bad.

As with all other inventory management techniques, there are benefits and disadvantages to both. Most businesses still prefer to use the FIFO system to prevent older inventory from getting stuck in the warehouse or storage. It is still so much better to sell the older stocks on hand so that fresher and newer stocks may come in soon. LIFO is not always practical for most businesses due to these reasons.

5. Reorder Point

It is important for the reorder point to be identified as part of a beneficial inventory management system for businesses. The reorder point is defined as the minimum quantity or unit that a business should have in their stock or inventory before having the need to place another order for that specific item. The reorder point is typically higher than that of the safety stock numbers because this inventory management technique must factor in lead time for the processing of the order.

As with other inventory management systems, this technique prevents the business from having stockouts, especially of fast moving and in demand items, and it also ensures that there will be no unnecessary inventory pile up in your stockroom or warehouse, thereby avoiding unnecessary costs to the business operations for the period.

6. ABC Analysis

Basically, this inventory management technique classified into tiers your items or goods that are for sale and what brings in the most profit and the least from among all of them. With this type of inventory management technique, companies and businesses are able to have better inventory controls especially with their highly valued inventory items. This technique also helps to identify which would need reduction in costs or losses and to also be able to see where to improve on in terms of stock availability.

Inventory management is a dynamic concept in the realm of business especially with the flourishing of e-commerce businesses and online retailers. To keep up with the demands of the changing times, some of these conventional concepts have also been made to adapt to changes in the business scene but still keeping up with the known and accepted accounting standards governing it. Inventory managers should be able to make the proper recommendations to the business owners to reduce unnecessary costs and have better profit margins and increased sales with the right application of these inventory management techniques suited for the business.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post Inventory Management: Benefits and Techniques for 2021 first appeared on Bizzloans Australia.

Here are some of the essential financial tools for business that every small business should consider investing in for their operations.

1. Accounting Software

We all know that accounting for a business is a tedious task and it is essential that a small business has efficient, effective, and error-free records in order for a business owner to readily see how the business is doing in the financial aspect. From workbooks to ledgers and journals, a small business now needs an accounting software that could very well manage the whole accounting process from raw data entry to drawing up of financial reports for interpretation and analysis.

Several accounting software has been made available to all kinds of business and personal users worldwide. The initial investment may seem a lot on the onset but the advantages of having one outweighs all the disadvantages in the long run.

When looking for an accounting software that would fit the needs of your small business, it is important and recommended that you look for one that would include having to process basic accounting tasks such as invoicing, client and vendor management, automated billing of invoices and recurring payments, expense tracking, estimation and quote creation, tax preparation, processing of payroll, and integration to your current point-of-sale software, if you are using one.

QuickBooks has been in the market for quite a while now and has been tagged as the gold standard of accounting software for small business accounting. Xero, an online accounting software solution has been gaining popularity and admiration from small business owners because it is relatively cheaper and the use of cloud technology reduces the use of paper while all accounting records become centralized and easily accessible by authorized users.

In choosing the right accounting software, the business owner should consider a powerful, robust, and flexible one that is user-friendly at the same time. It is also important to check whether the company would offer free training for the end users so as to make them more efficient and effective when using the software since this is one very important financial tool in the business.

2. Online Business Plan Services

It has always been said that starting a business entails a great deal of solid planning for all aspects of the business operations. At the onset, plans are carefully drawn up and thought of because this is supposed to be the operations manual of the business as a whole to begin with.

Although this can be done manually and traditionally, online business plan services have been gaining traction to small business owners because of the ease of creating plans that are well-suited for the kind of business that one has especially for presentation to potential investors. These services provide the use of a number of templates and tools needed to turn your grand and great business ideas into something that is profitable in the future. LivePlan is one of the top companies that provide this kind of service.

Online business plan services are still considered optional, but it is one of the financial tools for business that a small business owner may avail of should the need arise.

3. Web Hosting

Businesses now thrive online and what better way to promote your business is to have a strong online presence that reaches out to your customers and potential clients via social media platforms and your other financial tools for business.

Web hosting has become one of the most sought-after and essential financial tools for business. Web hosting services used to be very expensive as only the big companies and businesses can afford it. As the years went by, people have been on the lookout for businesses that have websites they can refer to and look for to gain access to a wide range of options and services that will suit their needs.

As web hosting services expand their service offerings to fully integrate customer relationship management and digital marketing services and other financial tools for business being used by small businesses, this in turn has made small business owners invest in a good capacity web hosting service so that they will be able to customize and tailor-fit their websites to the needs of their customers and potential clients.

4. Antivirus Software

We have all heard the names Norton, Kaspersky, Trend Micro, and McAfee, to name a few. Since time immemorial, these names have been associated with reliable and antivirus software that has been made available to both individual and business users alike to protect their computer systems from acquiring unwanted malware and viruses. As one of the most important financial tools in business today, investing in a powerful anti-virus software is essential to protect company-owned materials and to prevent interruptions in the business operations. With the increasing number of phishing activities online, the business owner needs to ensure that his computer systems will not fail in the course of day-to-day activities of the business.

The prices of anti-virus software have increasingly been competitive enough for small businesses to afford it. Anti-virus software companies have plans that cater to every size of business and provide the needed protection for all their available computer equipment to be covered.

5. Time Tracking and Management Software

Especially now that a lot of workers and employees have been working from home due to the pandemic, business owners need to track the time and productivity of their employees even while working from home or remotely. It is not to pry on personal activities or for anything else, but it is to ensure that the employees are wisely making use of their time for work especially now that working outside the confines of the office is becoming the new normal. Time tracking and management software has been gaining so much popularity as a financial tool for business because it enables business owners to keep track of their employees’ time and productivity, be it within the office or when remotely working from home for proper salary payouts and for providing the benefits that employees are getting from the company.

There are a variety of time tracking and management software available in the market that are not that expensive and the investment by the business owner would be well worth it. Most of them are even free for a certain number of users and upgrades may be made available as the need arises. TimeDoctor, Intuit QuickBooks, On the Clock, and the like does the job well for your time tracking and management needs. Aside from payroll integration, you will be able to keep track of your employees’ leave credits and overtime pay. There are also available features that would enable you to track individual projects, invoices, and expenses of every employee in the company.

6. Inventory Management Systems

Every business engaged in the selling of goods needs to have a solid inventory management system that will enable the business owner to monitor the flow of goods being sold and purchased by the business efficiently and effectively.

Inventory management systems may be available individually or may already be integrated in the accounting software of your choice. Aside from tracking where your goods are, this financial tool, when integrated into the company’s accounting system, may allow the generation of sales and other salient financial reports needed by the business owner and its investors, it could be set to send out alert levels when the supplies are low, and there is also a feature that enables order management that covers packing, shipping, and tracking orders. Just like everything else, this financial tool for business is customizable and may be made tailor-fit to suit the needs of the business when it comes to inventory management.

7. Expense Tracking

Every business must have a record of its expenditures and keep it up to date on a regular basis. This would enable the business owner to track the company’s spending for irregularities and interruptions that may be brought about by certain financial activities or circumstances.

This type of financial tool for business has been gaining traction because tracking can be done remotely, and mobile functions are also in place. Aside from being able to track company expenses, this type of financial tool may be used by individuals to track individual expenses of those who may be allocated company funds for certain business transactions. One may not realize it but most of the small expenses like gas, food, toll fees, and other similar expenses are hard to track at times. Enabling the use of this financial tool for business can help record and monitor these small expenses to ensure that company funds are being used appropriately and accordingly. With versions available on mobile, receipts tracking is also possible. All you need to do is scan your receipt and the software will be able to optically recognize the transaction details on the receipt making it more efficient in terms of recording and storage of information in an almost paperless environment.

8. E-Commerce Solutions

As businesses go online and transact their business there, having e-commerce solutions for your business has now been considered as a very vital financial tool for business. What used to be just purely over-the-counter transactions have evolved into hybrid sales transactions which include online business transactions and closing of sales deals.

When a business goes online, there are so many options by which you can transact with your customers and get paid. In the same manner, your business suppliers may already be transacting online as well so the sales process becomes simpler and more direct.

Online payment options like PayPal, BPay, GooglePay and ApplePay have become in demand simply because it makes the process of buying and selling easier and less complicated. Integrating these payment options in your business web portal enables you to track real time all transactions that come with just some strokes and clicks on the computer. And since there is no actual cash handling, everything goes directly to the company’s bank account. Sales and expenditure reports may be readily generated and analyzed by the business owner for any adjustments that need to be made in the course of running the business.

From the customer perspective, a company that has an online presence and has been using financial tools for business such as these would readily be more eager to transact with you. As with the recent developments due to the pandemic, almost one hundred percent of customers have been using online shopping for just about anything nowadays – from clothes, food, groceries, dog supplies, office supplies, even cleaning supplies – everything can now be bought online from one-stop shop companies such as Amazon, eBay, and even your local grocery shoppes. If your customers know that you have a safe and secure way of transacting business online, your traditional customers may readily shift to being online customers, too, in the long run.

Probably, one of the things that prevent people from utilizing online shops, even those with secured and safe e-commerce solutions in place, is the fact that fraud has already become advanced as well. Using reliable and highly secure e-commerce solutions that always aim to protect your business, our company funds, and that of your customers will eventually make you a trustworthy business to deal with. It is important that your business ties up with a reputable e-commerce solutions provider that everyone has access to or familiar with, applications that are easy to use even by someone who is technologically challenged, and one that will protect you from fraud and other scrupulous activities that proliferate online.

9. Business Credit Card

One of the important financial tools for business nowadays is a business credit card. One may think that this could be a burden because this would entail additional cost in terms of interest rates when used. But why is it considered as an important financial tool for business nowadays?

Think of your business just like an individual person would. We all get to work hard to earn a good credit rating and score so that we could buy a house or a car or invest in business. Businesses work the same way, too. Businesses have credit ratings and standing that they would need to improve and maintain over time so as to be eligible for grants, business loans, and gain the trust of its investors, creditors, and other customers.

The business credit card provides an immediate remediation for any contingency purchase or use within the course of business operations. A business entity is issued a credit card when it has proven that it is worthy of such privilege. A good business credit rating is also needed in order to be issued a credit card under your business’s name. It is to be noted that the business credit card’s use should be regulated, controlled and as much as possible, would be limited only to the most urgent needs of the business.

In any event that the business encounters cash flow irregularities or setbacks, the business credit card may be an alternative to present to private lending institutions when you need immediate cash or short-term business loans. The credit line you have with your card may be used to fund such business loans.

10. Social Media Platforms

Social media platforms have evolved and have improved over time. From Friendster to Facebook from Multiply to Instagram, everyone has been on it at one point in time.

Businesses have now made it integral in their operations to have social media sites in place to market their business because almost everyone in the world is already on these platforms. Being on social media has now become an important financial tool in business if you do not want to be left behind and be at the end of the line. Social media platforms help businesses gain more mileage in terms of customer base and reach. Exposure is not limited to your area but just about anywhere else in the world.

A good word of mouth is important on social media. As most social media platforms integrate artificial intelligence-based applications for customer relations and digital marketing, it is very important for your business to be able to maintain high level of standards on your services and goods offered to your customers and be able to get acceptable and feedback from them that will entice others to go to you and experience the same positive thing that your customers experienced with you.

When selling goods, it is important that the social media platform you choose is secure enough to protect all your financial resources while at the same time minimizing the transactional time that customers spend when buying your products or services online. You would not want to have your customers go through one site after the other for ten times just to make a payment because no customer would want that. In the end, it should be about getting positive customer satisfaction, maintaining their loyalty to your business so that your business will always have a steady flow of income on a regular basis.

With any financial tool for business that you use, a business owner should always look at how it would improve the operations of the business. Upgrades and availability of services may cost the company a lot but, in the end, it is a question of whether these financial tools will serve well for the business in the long run or not.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post 10 Important Financial Tools Every Small Business Should Consider first appeared on Bizzloans Australia.

As with any other opportunities, businesses do not become financially stable overnight. The financial stability of a business depends on several factors, and it entails a lot of hard work for the business owner and his team to achieve that. At any given time, there may be circumstances that will put the business in a position where its financial stability may be challenged. So how does a business owner put into place measures that would help improve financial position over time?

1. Seek advice from your business advisors

Not all businesses have official business advisors. Having them on board on a monthly retention fee can be costly to the company so they are usually on an as-needed basis. The expertise and knowledge of the business advisor is essential in making sure that everything is covered when it comes to business operations including its financial position.

The company’s accountant and the whole finance department of your business are key players in ensuring that the business is always in a good financial standing. They work hard to plan, strategize, and implement all financial policies and procedures that are in place in order to ensure a steady and, at the very least, normal cash flow in the business’s day-to-day operations. Their recommendations are almost always for the benefit of the business which the business owner should not disregard at all. It is all right to seek a second opinion from a certified business advisor so that the business owner may come to terms as to how the financial position of the company could be further improved over time. The business advisor should also follow through with his recommendations to the business owner in order to achieve the business’s improved financial position.

2. Have a clear and solid business plan

Anyone who ventures into a business should have a clear and solid business plan for all aspects of the business. These plans should be strategic and realistic at the same time. Business owners all aim for a generous stream of income at the end of the day. However, a business owner should always take into consideration certain challenges and interruptions that may happen along the way. Forecasting is also very important when conscientiously planning out the business needs in the future, especially in terms of its financial operations, simply because the trends or activities from previous accounting periods can dictate how the business will do financially in the future.

Your business plan is your operations manual. The business plan should also include your contingency plans and measures just in case one thing earlier planned does not work out for the business. A business owner should always be prepared for anything that may come along especially if it would concern the financial position of the business. The business owner should always aim for a stable financial position or better yet, have an improved financial position for the benefit of everyone involved in the business.

3. Consolidate and clear outstanding debt

Businesses avail of business loans to cover for immediate cash flow interruptions or to infuse additional funding for a possible purchase of new equipment or to make the business more liquid in terms of cash reserves. Whatever the reason there is for the business to take out loans, it is important that the business does not operate and survive mainly from taking out business loans because eventually, interest charges would eat up everything that the business is earning through its regular operations.

For what it is worth, talking to your business advisor about consolidating your business loans would be a good way of knowing whether to click the bait or not when it comes to consolidation. It may seem to be the best option to consolidate your loans especially if the business has multiple outstanding loans under his name. However, there are still instances that this may not be exactly the solution that you are looking for. Your business advisor will be able to help you look and study the data you have at hand so you can decide whether consolidation would be good or bad for your business. If the business decides on having the loans consolidated, a lot of trusted creditors or lending institutions may be able to help so that the business will be clean of loans and that cash flow would be much better in the long run.

4. Sell unwanted or unused assets

A business is usually almost always complete in terms of fixed assets when it starts to operate. In the regular course of business operations, there would always come a time when a machine or piece of equipment becomes obsolete or becomes unusable due to changes in the processes involved. Unwanted or unused assets can always be converted to cash by simply selling them and the proceeds will go back to the business’s cash reserves as part of the capital or even a revolving fund for the business. Whichever way you choose to allocate or assign the proceeds of the sale on your accounting books, this will help the business get a better cash flow on a more permanent basis and improve financial position in the long run.

5. Rearrange or reduce business expenses

The importance of being prudent in terms of business expenses can never be ignored by any business owner. The business may start out with a set of expenses that are to be regularly paid and there may be ones already on the list but would have to be reduced or removed as the business operations progress. It is very important for the business owner and its finance team to be able to identify expenses that are essential to the business and remove those that are only supplemental or eventually just a waste of the business’s funds in the long run. Switching to other providers who can provide better deals and discounts on your business insurance policy may help reduce an essential business expense, but the business is benefiting more from it at a lesser cost to the company. You may also want to consider a periodic payment plan for bigger expenses rather than paying it at just one time. All of these should be carefully assessed and planned accordingly. Lesser essential expenses coupled with a good collection of invoices and other receivables plus well-managed and controlled business overhead expenses would surely help the business improve its financial position.

6. Stay on top of your invoices and collection

What better way to keep a good inflow of cash to the business is to ensure that you stay on top of all your business’s receivables – which include your invoices and other collectibles. This simply means that your accounts receivables are regularly monitored and there is an efficient and effective collection process in place to always collect invoices on time all the time. It is important to note that to improve financial position, a steady cash inflow is needed so that your cash flow statements would not yield into the negative at any time. The business may offer prompt payment discounts and other applicable trade discounts in order to encourage customers to pay their invoices on time. Although discounts may seem to reduce income on the part of the business, it does not necessarily mean so. Providing discounts both help the business and its customers in a positive way when it comes to their respective cash flow statements.

7. Provide multiple payment options to your customers

In this day and age of cashless and no-contact payments, it is essential for the business to begin offering multiple payment options to its customers for more flexibility and to encourage on-time payments from them. The use of PayPal, BPay, Zip, debit cards, and credit cards enables businesses to set up auto-debit payments from customers, decreasing the risk of late payments or even non-payment of outstanding invoices. Always remember that an efficient collection process of outstanding invoices helps keep your cash flow positive which in turn can help a lot to improve your business’s financial position.

8. Use new marketing techniques

Digital marketing is now the thing and is the future of businesses. As social media platforms have flourished and its services have improved over time for businesses, the business sector has found much better and more economical ways of getting the word out there to its customers and prospective clients. Digital marketing is relatively cheaper than traditional marketing techniques but is now highly considered to be more efficient and helpful in promoting businesses and services. Improving your marketing strategies via new marketing techniques help reduce advertising costs to the business while yielding better results in terms of gaining new customers and spreading the word about your business. Lesser marketing cost that comes with a potentially great influx of income from new customers can help your business have an improved financial position.

 9. Digitize your business

Small business owners may not see the need to invest in customer relations management software or even on an accounting software to help run and maintain accurate records or to automate certain repetitive tasks that take away so much productivity from your employees.  Digitizing your business may seem expensive so that is where a cost-benefit analysis would come in to make sure that the benefits of investing in an accounting software would outweigh its disadvantages. Accounting records need to be accurate one hundred percent of the time. Although data would still be coming from the staff, accounting software can readily identify errors and it would be easier to find these errors rather than rummaging through so many paper and printed records which takes a lot of time away from your employees’ productivity.

When it comes to repetitive tasks, there are now artificial intelligence-powered software that help automate the customer service functions of small and large-scale businesses alike. Most social media platforms integrate free AI-powered applications that help reduce the time spent on answering repetitive questions or providing information that is regularly being asked about the business. Lesser marketing or customer service cost yet it can make your employees more productive and less stressed. The results to an improved financial position may not be immediate but can be seen through the cash flow statement in the long run.

The use of cloud-based software provides lesser costs for businesses and would still give better benefit to the business with its use. With an online file management that is centralized, this helps reduce the cost of office supplies all year round. Storage of information is also maximized, even to the extent of a lifetime, and information about anything, especially financial records, are easily and readily accessible – with the right controls and access to authorized personnel. The savings from these reduced costs help improve financial position with a better cash flow for the business operations making the investment on digitizing your business all worth it.

10. Monitor your cash flow and day-to-day expenses

As we have been talking about cash flow statements and expenditures, monitoring your cash flow and day-to-day expenses should always be done by the business owner and the management team. It is through this that management will be able to pinpoint what needs to be adjusted in terms of expenses, what causes overhead expenses to shoot up in the course of regular operations, how is the collection process going, and other similar circumstances. Regularly monitoring the cash inflow and outflow helps in planning out changes that are essential in making sure that the business will not be short of cash and its reserves which results in having the confidence that the financial position of the business is not compromised in any way.

Having the right financial controls, especially when it comes to expenditures, help monitor irregularities in the business’s cash inflows and outflows. These financial controls extend not only to actual cash on hand or its cash reserves, but also to how the finances and assets are put in place. Misplaced or mishandled funding or assets yields a huge effect in the cash flow which can put the business in a tight position. It is essential that the business owner and the management team are aware of how these controls are used to monitor financial activities and to ensure that these controls will help bring about an improved financial position for the business.

11. Meeting tax deadlines

Taxes are the lifeblood of the government and the taxes that are paid to the government are used to provide everyone the benefits that the government has to offer. A business needs to make sure that it always pays its taxes on time as well. A business without tax deficits leaves a good credit rating on your business profile making it a more trustworthy entity in the eyes of your creditors, vendors, suppliers, customers, and your employees. Loyalty to the business is maintained or even improved which in turn would mean a steady flow of income on a regular basis. Taxes may seem to be a burden because of the regular costs it takes out from the company budget. But over time, its benefits still outweigh the costs. 

12. Level up your financial competencies

This statement speaks to the bosses of the business – the business owner, management team, investors, stakeholders, and to the people who are considered important in the course of the business operations. Not all business owners are equipped with an all-around financial know-how that is why they have an accountant and a finance team to deal with financial operations. However, it is vital for these people involved in the decision-making processes of the business to have the financial knowledge used to make sound financial decisions for the benefit of the company.

Aside from learning the basics of financial management, it is also important that business owners fully understand the interconnected processes of the accounting cycle and be able to at least analyze and interpret the results of these financial activities and how they affect the balances of the business’s accounting records and books. It may really seem complicated at first, but the analysis of any financial data presented may be simplified if the business owner and the management team know the basics.

Attending seminars and courses that could make a business owner more adept and knowledgeable in handling financial data and other financial competencies needed in running a business, does not only improve his personal credentials and know-how. When a business owner knows and can easily translate raw financial data for other members of the team to fully understand its meaning and impact to the business, better planning and forecasting can be done to rectify errors in the cash outflow or to further improve cash inflow for the business if it is already flourishing. The business owner can definitely use an “upgrade” of financial know-how in order to properly strategize and steer the business into achieving an improved financial position in the future.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post How To Improve Your Business’s Financial Position first appeared on Bizzloans Australia.

A failing business causes a lot of problems in all aspects and could be a huge burden for the business owner especially if this is the business owner’s main source of income. Businesses do not really fail overnight but there are several factors that could bring about this financial catastrophe in the long run. A business owner and the business’s management team should not fail to see the warning signs once they are already coming up one after the other.

A business owner may want to watch out and avert these signs of a failing business the soonest time possible – to save face, to save all its internal and external customers, and to save the business and the investments that went with it.

1. Cash Deficits

In the normal course of business, cash deficits come about and there are several ways that a business owner can avert these deficits for as long as business operations continue, and management recognizes the need for an intervention in terms of expenditures by means of planning and adjusting the cash flow of the business. It is also possible that a new infusion of capital and possible new investors may be needed to rectify the erring cash flow of the business.

However, if cash deficits are always being addressed by infusion of new capital via loans, this could pose a huge problem for the business operations in the long run. It just means that cash is not flowing normally via its sales, thus, the need for loans to address short-term cash flow problems. Inevitably, these loans could all the more eat up and impact the minimal cash inflow of the business which could result to bigger problems such as non-payment of usual business obligations such as employees’ salaries, monthly business expenses, and the like.

A business should not come to a point where it would exhaust its remaining cash reserves and its borrowing capacity. If this happens, it is highly expected that the business will fail and will bring about problems with creditors and even its external investors.

2. Drastic Spending Cuts

Business owners are aware that there are lean months during business operations and if this happens, one logical thing to do is to cut spending on items that clearly eats up the cash reserves. It is one of the easiest ways to do when interim cash flow problems arise. This is normal and happens to almost all businesses. However, when these drastic spending cuts are placed on reducing the workforce or its staff level personnel, or even drastic marketing budget cuts which could result in the eventual loss of its market share, then this is one of the clear-cut signs that you are in the brink of having a failing business. The current pandemic had this coming to a lot of small businesses and a number of the big ones, too, that eventually, business owners had to temporarily or permanently close down and some even had to declare bankruptcy.

3. Reaching Borrowing Limits

In relation to cash deficits, businesses sometimes need to borrow money for interim cash flow problems. Of course, there are times when businesses need to resort to borrowing to address their short-term cash problems and it is not to say that businesses are not supposed to be borrowing money especially if it is just for the short term. It is when you have reached your borrowing limits that can indicate that you are having a failing business. When borrowing for the business becomes a habit and your business is just running on loans from month to month, then this is a red flag that your business is further going down the drain and would eventually leave your business in a huge financial trouble with its creditors.

4. No Salary from the Business

A business owner expects to also have a salary from the business that they have because he is still considered an employee of the company. When a business owner foregoes getting his salary to pay off employees or to allocate the salary to the payment of pending business obligations, this is often an indication of a failing business. Suffice it to say, when the business is not able to return part of the business owner’s investment or even pay him what is due him for managing the business, his is a failing business at some point. This needs to be immediately addressed and careful planning and adjustments to certain expenditures and other cash outflows should be considered in the course of business operations in order to curb losses and a possible failing business.

5. Poor or lack of high morale within the business organization

Be it a small- or large-scale business, it is very important that the company provides all the needed moral support and attention to its personnel. It is important to note and recognize the achievements of your employees and to promote the ones that deserve to be promoted for exceeding the expectations set by management on their jobs. If the business does not recognize the work and effort of its employees, it is highly likely for these employees to look for opportunities outside of their current work environment where they will be better appreciated and acknowledged. When employees leave, it affects the business’s turnover rate that could eventually cause a failing business in the long run. It is also right to say that a business should hire the right employees whose goals are aligned with the business’s mission and vision so they could work together to achieve the targeted goals of the business. When the right employees are there who are equipped with the right mindset, right attitude, and a concern for the business who takes care of them, these valued employees, in turn, take care of the business for you.

6. High Turnover Rate

As mentioned above, another sign of a failing business is when there is a high turnover rate of employees. When there is an increasingly alarming number of key personnel and regular employees who are leaving their jobs, whether for better opportunities or a higher pay, this could be reflective of the business being unable to fulfill their promise of career growth and development within the company. Turnovers in businesses or companies are normal. But then again, when turnover rates go way overboard, this will entail a lot of cost to the business in terms of hiring new employees to replace the ones that left and to train these new hires for the jobs left. Remember that hiring entails a huge cost in the company budget and a business owner would not want to hire like five or seven times a year just for one administrative post being left out every single time, for example. It is best that the company’s human resources department would come up with a great employment package where the employee would always feel secure and happy with their jobs. Remember that career development prospects within the business is very important, as well as good benefits and compensation, and a friendly and conducive working environment so a business owner should always consider and provide these for his employees.

7. Ineffective Communication

When a business owner is not in the loop of what is happening to the business, when there is secrecy between departments, and information is not properly channeled to everyone within the organization, these could lead to a failing business. The business owner and its stakeholders should always be in the know of what is happening within the business in all aspects – financial, management, operations, and other vital aspects of the business. It is impossible to gain the trust of investors if there is lack of communication from within the organization about the state of the business, thus, a possibility of a failing business in the long run. When there is open and effective communication among all channels, problems and concerns can be very well managed and plans may be put in place in order to address pressing issues that are vital to the business operations. It is also very important to cascade information in a timely manner so that everyone involved in the business operations will be able to properly address concerns and effectively solve the issues that are at hand to save the business from failing.

8. Inventory Concerns

A constant concern about the status of inventory is indicative of a failing business. When you are constantly out of stock of your items or your inventory is not moving, this is a concern that a business owner should address immediately. When your goods are not moving, it means that no sales are coming in and your goods are just stocked. And if you feel that you are in an all-year round of having a slow season, then something must already be wrong in the way that you are moving your goods around. The more inventory is stocked and not moving around, it could leave your business without cash making you vulnerable to losses in the long run. If you are in a service business, little to no availment of your services may also mean the same thing – there is no service income coming in. In terms of items or inventory of goods being out of stock, it could be an indication of poorly managed inventory or that your vendors are not willing to provide you with the goods you need anymore because of non-payment of your dues to them. All of these may indicate a failing business which the business owner should address immediately.

9. Late payments from customers

Every business has in place an accounts receivable schedule that should be strictly adhered to in the normal course of business operations. Establishing and enforcing this schedule regularly on every period provides the company its much-needed funding to keep the business going – from payment of monthly dues to replenishment of inventory, payment of employees’ salaries, and the like. If there is a constant delay in receiving payments from customers, this would eventually pose a problem in the cash flow of the business. There should always be an established collection system in place and that your payment terms are long enough to supply you the needed cash inflow on a regular basis. If these things are lacking, you might be presented with a failing business sooner or later.

10. Inability to pay bills on time

The business’s ability to pay its creditors, suppliers, and vendors on time is parallel to the receipt of timely payments from customers. When a business starts to be regularly late in settling its dues on time, this poses a huge problem and presents itself as a sign of a failing business. When you are unable to pay your regular financial obligations promptly, this sends out the signal that your business is unable to reach its target income for the period or the business is not liquid enough anymore to sustain business operations. Thus, this gives the immediate impression of your business having cash flow issues which is not good in the eyes of your creditors, suppliers, vendors, and even your business investors. It is important to realize that business owners should work together with the finance team to immediately rectify errors that may be present in its accounts receivables process and collection schedule as against the schedule of payments for the expenditures of the company, to avoid the eventual failing of the business. A business owner would not want to be receiving phone calls from collection agencies and even subpoenas for a court hearing due to non-payment of debts. These scenarios are indicative of a failing business and it should be dealt with right away with a sense of urgency and need to keep the business afloat.

11. Failed Marketing Plans

Marketing is very important in any business venture. Having a great and solid marketing plan ensures that your business efficiently reaches its target market and gets to gain a customer base that will keep you in business for as long as they are there. The world has become noisier and more dynamic than it has ever been so a business owner really needs to pick up on the pace to gain a place in the market. For small businesses, allocating a good percentage of the business’s budget together with hiring the right marketing people can greatly help to ensure that your business will not be a failing business in the long run. If you are on a tight budget, it is important for your marketing people to know how to allocate that budget for advertising purposes and make sure that they maximize all means possible with their budget to help the business pick up. There are several ways now to minimize marketing costs but still it is workable to gain as much reach as possible to your target market. When the business is not marketed right, that is, the business does not reach its intended target market nor does it gain popularity and attention from the marketplace, then it could contribute to a failing business.

12. Poor Customer Service

Given that your business is marketed right, you have a good working cash flow, employees who are satisfied with what they are having with the business, it is still very important for a business to make sure that their customers are being served right. Even if you have all that it takes to keep your business going but if your customers complain left and right, there is still a very big chance that you could end up with a failing business. Addressing customer complaints may be difficult at most times but the business owner should see this as a great opportunity to look at where the business needs to improve and to rectify errors that were made in certain processes along the way that resulted to the complaints. The business needs to take care of their customers, just as they are taking care of their people from inside running the business.

The above are the most common signs of a failing business and there are still others to look at. It is essential that the business owner and its management team should be able to identify the above red flags the moment they present themselves to the business operations in order to save the business from failing and to keep it thriving especially at this time of a pandemic. There are many ways by which a failing business can be saved once the problems have been identified. Contingency plans should be in place, strategic planning of remediation plans should be handy, timely intervention on even the most minute problems that may arise, and immediate remediation should be done and be worked on hand-in-hand with all the people involved so that the business may stay afloat and to keep you from having a failing business altogether.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post 12 Signs of a Failing Business first appeared on Bizzloans Australia.

Artificial Intelligence has been defined by Merriam-Webster as “the capability of a machine to imitate intelligent human behavior.” AI is also called “machine learning” because as it is defined, it is the process of teaching a machine on how to react on some simple data types and as you add more information to it, the more complex the processes become for the machine.

Artificial Intelligence used to be frowned upon because nobody has really believed that it is possible for machines to do what humans can do. It was believed that machines can never replicate the way the human mind thinks or even do tasks just like how humans do it.

With rigorous and thorough studies, countless of research and experiments, and with the advancements in technology over the years, artificial intelligence in business has helped, especially the smaller businesses, automate their services and lower the costs that small businesses incur in the course of its operations. Artificial intelligence has also been known to reduce risks in doing business, increase sales, and improve customer service.

Currently, artificial intelligence is used in almost everything, including cybersecurity software, Customer Relationship Management (CRM) systems, among other similar systems as tools by which small businesses can use in order to streamline and make their business operations run smoothly and more efficiently. With this premise, the following are some ways by which you can use AI for small businesses for the same purpose.

Artificial intelligence in business has changed the way people have been doing business, especially now that we are all still trying to recover from a pandemic. Despite the global negative effects of the pandemic in all industries and economies, the pandemic paved the way to boost the artificial intelligence industry because a lot of the small businesses are now going online and utilizing all the available tools to make business operations easier and less costly.

The use of artificial intelligence in business is mostly to enable these businesses to manage and maximize whatever shortage on skills and manpower that they have. Integrating these deficiencies into a good machine learning technology would enable these small businesses to maximize their resources and still put them to good use and a considerable rate of advantage over their competitors.

With all these talk about artificial intelligence being used in business, how will this seemingly complicated technology help small businesses thrive and survive especially during this time?

1. Improvement of customer service

You will notice that most businesses have now gone online, with product or service inquiries that must go through messaging applications like SMS, email, Facebook Messenger, Viber, or Instagram direct messaging, among others. A lot of these small businesses have already employed the application of artificial intelligence into their business systems through chatbots that automates answers to all possible questions that might be asked about a specific business’s product or service. Of course, there are still limits to what these chatbots can do and answer because the activities and answers of these chatbots are also programmed by the staff into the AI systems that the business is using. And when this option has been exhausted, that is the only time that a customer service representative or agent may come in and assist you further with your other queries.

Why go through chatbots? It is simply because this saves the customer from a lot of waiting over the phone for someone to answer your basic queries. Almost all chatbots of these small businesses would carry almost all the possible and most basic questions and answers about the business’s products and/or services that a potential customer might want to know about the company.

2. Understanding your customer data

A small business’s customers may come from people from all walks of life. Normally, a business would have a database of their customers for records purposes. Usual data on this file would include the type of product or service they purchased, the number of times they purchased from you, their location, and other pieces of information that are on their invoices.

What is good about employing AI for small businesses is that it will be able to give the business owner a variety of insights into the behaviors of their customers when it comes to online purchase history, their online interactions in the webspace, basically, their digital footprint. It is said to boost the business’s relationships with its clients and gain even more in the long run.

Employing artificial intelligence to interpret this data may now be done so that the business owner can better understand the type of current customers that he or she has. This will also be helpful in identifying potential customers from certain locations or groups in the future where the business’s products or services may be offered.

3. Predicting customer behavior 

Now that a lot of the businesses are already online, so do their customers. These current and potential customers keep abreast with the latest trends and updates on practically almost anything that they can purchase around them via their social media platforms.

Artificial intelligence for business helps curate basic information and preferences about your current customers and potential clients just by tracking these social media platforms that you are on. Basically, when a customer or potential one clicks on a post of yours or maybe just your webpage, some of these automated trackers curate the activities of these customers related to your post and the AI system may be able to tell the business something about the demographics of your customers, such as location, interests, and the like.

AI for small businesses can use these data gathered to forecast possible sales offerings of better or a wider variety of products and services that would fit their customers’ needs and wants. These data may be used to provide key insights into what the future of the business operations would be and take this as an advantage against the business’s competitors.

4. Streamlining tasks for human resources

Small businesses have limited or even have a shortage of manpower and skills that would be needed to fulfill the most mundane and most repetitive of tasks within the business. We are all aware of how tedious human resources work is in terms of the hiring process which includes recruitment, onboarding, trainings, and other similar tasks. AI for small businesses can help streamline these services.

Currently, a lot of employers and small businesses have already started using artificial intelligence integrated software to aid in the processing of job applications, administering the required psychometric employment tests, and even the processing of the needed background checks to complete the recruitment process. These saves the business a lot of time and cuts the manpower needed to man these recruitment events and will be able to help the business hire the best and right candidate for the job.

5. Increasing productivity

A small business should be able to maximize productivity even with limited people and resources. AI for small businesses can help that happen even with the limitations involved in the business operations.

There are repetitive and, sometimes, mundane tasks within the business that can be addressed using artificial intelligence programs and algorithms. What it does would be to remove these tasks from people within the organization, most especially if there is limited manpower. Bigger enterprises, especially those in the manufacturing sector, has already started using robotics to replace human employees from doing simple yet time-consuming tasks such as labeling or packing products. These human employees are then delegated to tasks that would better need their skills or expertise.

Pre-pandemic, the use of productivity tools and applications have been consistently on the rise because it helps streamline some processes that gets work done easily and with just a few clicks. Especially now that businesses have provided work from home and remote work options because of the pandemic, these applications and artificial intelligence for business tools have become more useful and makes communication and work more bearable. The use of these tools such as Evernote and Asana may be designed to suit the workflow of a certain team in order for them to still be productive and meet deadlines even while working from home or anywhere remote.

At an age where businesses are going online and processes are being made more simple by programs under artificial intelligence, human intervention and interaction is still needed. However, the repetitive tasks may be delegated into an artificial intelligence system that lessens the workload so that the employees or staff may be able to do other tasks that cannot be done, for now, through artificial intelligence.

6. Improvement of sales and marketing strategies

We have all been receiving emails containing marketing information about products and services being offered by different companies. We sign up to the newsletters of our favorite brands, wanting to always be updated with the latest products and offers. We will also, sometimes, willingly sign up for promotions of different products and services in the hopes of winning the good prizes that they offer and maybe to try out their products and services later.

As a lot of businesses have been transitioning to capture both the traditional and online markets, AI for small businesses have proven to be very helpful when it comes to the development of a variety of marketing strategies to boost their sales and increase their presence in both avenues.

Digital marketing is booming primarily due to lesser costs to the business. A lot of small businesses, especially startups and home-based ones, sign up on social media platforms such as Facebook and Instagram to gain wider reach and mostly for free. Also, these platforms include free AI for small business tools that collect and provide data to the small business as to how it is doing in terms of social media presence. Premium accounts on these platforms have to be paid but considering that you will not really need a lot of manpower to monitor the data, even the business owner can already get a hold of the data with just a few clicks and be able to discuss it with his marketing and salespeople for proper analysis and appropriate action or response.

Aside from that, there are a lot of free AI for small business apps that can be used to boost sales and increase their presence. The use of email marketing tools such as Mailchimp, has been proven to help boost sales and increase market presence of these small businesses. Although these emails may be considered “spam mail” before and are not really being read by people, the pandemic has made consumers turn to online shops and businesses for the services and products that they need. Subscriptions to these newsletters and emails coming from these businesses are being read more nowadays because this is where they can get discounts or deals that are exclusive for their loyal customers’ use. The use of the more popular Salesforce already integrates a customer relationship management software into their system making it easier for the marketing and sales team to draw up data from their customers to increase sales and profit for the business. Coaching your sales team may also be done via applications like Chorus or Jong are also proven to be helpful in boosting sales and improving your marketing and sales teams’ strategies. All of these applications are based on artificial intelligence which could truly make your work as a business owner more streamlined and easier.

The increasing number of online shops with artificial intelligence integrated functions have proven to be an effective marketing tool. They have become one-stop shops for every consumer’s needs without having to go out of their homes to get the items. On the logistics side, such as delivery functions, this function has also been tied into these platforms making a sale extremely easy to obtain without having to really go out of the office. Artificial intelligence for business has made the whole sales process easy to complete with just a few clicks, making it extremely convenient for current and potential customers. The data that a small business may gather from their sales online with these artificial intelligence for business tools are extremely helpful for their marketing and sales teams to come up with better strategies and plans to yield better sales numbers for the business.

Social media presence, especially for startups, home-based, and other forms of small businesses, is now considered to be an exceptionally reliable tool in ensuring that they can still meet their sales target even during this time of a pandemic. Artificial intelligence can track data of customers’ frequently purchased items and their other preferences, customers will be able to pick out delivery options suited to their needs, and the delivery of

7. Reduce risks and protect your small business by boosting your cybersecurity functions

At this day and age when almost everything is already online, including businesses, securing your business systems and resources is essentially important to protect them from the risks of hacking and other online intrusions.

Cybercrimes at this time have become so advanced that programmers must also level up their skills and programs to counter these events. Top cybersecurity companies are constantly improving their systems with increased research and making sure that their systems are fool- and fraud-proof for use even by small businesses. Unfortunately, a lot of these small businesses fall victim to a whole lot of these cybercrimes, ranging from fraudulent transactions to hacking of their customer databases (which contain sensitive and personal information) because they have not invested on a good cybersecurity program, especially for their online platforms.

Since a lot of these small businesses utilize a variety of social media platforms which also offer a wide array of cybersecurity programs for their protection, it is essentially important to do your own research and, if needed, seek the advice of an IT expert on what program the business would really need when it comes to applying cybersecurity programs that would best suit your AI for small business needs. One good advantage of using AI for small businesses is that with the use of both simple and complex algorithms, it would be able to track and identify user and data patterns which may potentially harm the business operations.

With the advent of online or e-wallets and online banking, most of these companies can and will be able to track the usage of your accounts with them. AI for small businesses backed by a reputable cybersecurity program will enable the small business to identify irregularities, threats, deviances in transactions by their customers, and point out possible breaches in security even before they are completed.

In conclusion, artificial intelligence for businesses is constantly being studied and developed to further enhance its features and resolve all evident loopholes for future use especially by small businesses. Artificial intelligence is already in place everywhere now not just by the big organizations but even by small and medium businesses to keep up with the times. There are still debates about whether AI for small business is totally feasible in the long run. With big technology giants such as Microsoft and Google going into full blast about improving artificial intelligence programs, we can expect more efficiency in business operations even with limited resources.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post 7 Ways Artificial Intelligence Can Help Your Small Business first appeared on Bizzloans Australia.

With all the current and possible setbacks that a business owner may encounter when you are operating a business, what does it entail to ensure that you will have enough cash on hand and cash reserves to comply with all the needs of the business operations and to protect the business from going into debts later as a result of poor debt management within the business?

1. Anticipate the business’s future needs to avoid surprises

At the onset of bringing into life the concept of having and running your own business, it is essential for the business owner to have a viable business plan. This business plan is more like the business’s playbook or operations manual to guide its employees and management team in the operations of the business., The business plan does not only include how to go about the operations but more importantly, the business plan contains a forecast on its possible periodical cash flow and income statements in the next weeks or months to come.

A business owner needs to plan for its business needs because it prepares the whole team on all aspects and possibilities that may arise in the middle of its operations. Proper and well-thought of contingency plans should also be in place for scenarios and situations that may inadvertently arise from certain situations. A good example that could be illustrated at this time would be the current pandemic that everyone is experiencing. The plan may not have been done ahead of time because no one anticipates a pandemic. But knowing about the current conditions in place, a feasible business plan may be drawn from the circumstances being faced at the moment especially if it involves cash flow management or even debt management.

Drawing up contingency plans and financial forecasts, which highly-involves the cash flow, would make the business owner more aware of all the possibilities that a certain business event might bring the business into. It is very important that business owners are not caught by surprise when they see unfavorable numbers come up because they already know what to do and they are well-aware of the measures needed to be done in order to make sure that debts will not pile up and financial obligations will be met.

2. Accounting and/or financial books should always be kept up to date

It is essential that the accounting books of the business are up-to-date primarily for the business owner to know the financial status of the business at any given period or point in time. The business accountant plays a vital role in ensuring that all records are accessible and updated. This will help the business owner see where to cut down on costs or maybe sell part of the business’s assets, if and when necessary, or to simply know where and what to adjust in the business operations so as to generate more cash for better cash flow management and make the business more liquid debt management obligations. Also, it is essential that you will be able to assign someone to closely monitor your business’s cash flow so that any form of interruption may be averted and that cash inflows are correctly accounted for. This person should also work closely with the finance team, especially if there are receivables and payables teams, for proper coordination and monitoring of cash flow management and possible debt management as well.

3. Know how much you need in order to break even

Given that the above business plans and accounting records are already in your hands, it is essential for the business owner to know how much is really needed to break even and the time it will take for the business to be able to do so. One good thing about having a solid cash flow statement, and other financials at that, is that you will be able to properly and somehow accurately forecast that numerical value and be able to plan ahead of time all the expenses and even future investments or infusion of additional capital to the business in due time. Of course, the primary aim of a business is not just to break even but to earn more than that. A very good cash flow management plan is definitely needed so you can plan ahead and reach the targets and goals of the business.

4. Cutting or delaying expenses

Most expenses of the business are anticipated and scheduled. The accountant and the finance team should be very much aware of how much money or funding is needed before, during, and after these payment periods in order to keep debts and other financial obligations at a minimum and also to keep the business operations flawless as possible. In the event of an overflow of expenses causing some interruptions in cash flow management, it is necessary for the finance team and accountant to look into the varied expenses that the business currently has. There may be expenses that can be dispensed of to make way and fund the more important ones. Some examples could be: If the business could pay off an installment purchase in one go with reduced interest rates, then maybe it would be better to pay off the remaining amount to unburden the cash flow in the next couple of months. There could be subscriptions, like periodicals, newspapers, or magazines, that are not needed by the business at this time.  These could be removed from the expenses list to allocate the funding to more important matters. If all expenses are necessary and cannot be dispensed of, there could be a way to make arrangements with the vendor or supplier for a new due date that will be in line with the inflow of cash to the business and would be more favorable to the business’s cash flow management in the long run. It is best that matters like the above be discussed in depth with the business owner so as to maintain the business’s liquidity and keep off from ballooning financial obligations.

5. Turn your assets into cash

There may be assets that can be turned into ready cash, such as idle equipment or machinery. Fixed assets such as an unused building or complex may be turned into ready cash be leasing it out to potential businesses who might need the office or space. Liquidating cash that is tied up into your assets will help tie loose ends in cash flow management issues of the business and ensure that outstanding debts are paid. Turning idle assets into cash is also helpful in debt management especially if the need is immediate and when loans are not available and not recommended to be availed of.

6. Optimize the use of your accounts receivables

A business’s accounts receivables are also a good way of generating cash for cash flow management concerns. First, you need to ensure that your business has a very good way of handling accounts receivables. There are small businesses who hire a separate team just to handle receivables and payables alone, mainly because they should be constantly monitoring these accounts and ensure that they are all paid in a timely manner. Your accounts receivables team, or even just your business accountant, should be able to set invoice timelines and terms that could maximize cash inflow into the business. It is also right to say that invoicing should always be done right. Even the littlest mistake, such as a transposed number or mistakes in dating the invoice, is material in the timely and correct collection of an invoice. Second, ensure that there is a timely delivery of all your invoices to your customers in order to avoid delays in payment. Timely collection of outstanding debts from customers is very vital in ensuring that your accounts receivables will be immediately converted to cash in your balance sheet, thereby, decreasing the chances of the business having cash flow issues. Draw up easy payment terms for your customers to encourage early payments which would be beneficial in helping to reflect a good cash inflow into your cash flow management plan and statement. And last but not the least, you may want to draw up discount programs and other payment options for your customers to encourage them to pay on time. Discounted and incentivized sales to your customers are proven to be effective in making sure that they pay their invoices on time because the discounts mean lesser cash outflows from their end. On the other hand, businesses should also ensure that there will also be corresponding penalties to those who will pay late or default. This is to help the business in recovering from the bad debt or losses brought about by the transaction. This way, management could still find a way to correct any cash flow interruptions this late payment or default may bring to the business.

7. Ask for deposits from customers

In line with optimizing your accounts receivables, another best practice would be to ask for deposits from your customers most especially for bulk purchases. As for most bulk purchases, asking for a deposit, or sometimes called a “milestone payment,” is at the very least, an assurance that the customer will be paying for the rest of the order or purchase of goods from the business. This should be tied together with the receivables terms of payments set by the business to their customers. The main goal is to be able to use that deposit or cash inflow for the other needs of the business. When your cash inflows are more than your cash outflows, this gives a good picture of how your cash flow management is doing as it reflects as a positive cash flow statement at the end of a certain period.

If, for example, the customer is unable to pay for their invoice in full, this deposit can be used to cover for the bad debts that will be incurred due to the non-payment or default by the customer. There is still cash inflow involved, though not in full, and debt management would still be under control.

8. Shrinking your cash outflows

Shrinking cash outflows are viable for cash flow management and debt management in the sense that you will be able to draw up plans and programs about acquisition of assets and payment of liabilities without impacting your cash flow statement that much. There are a number of ways by which you can do this. With regard to purchase of equipment, the business owner may want to consider buying a second-hand one instead of something that is brand new. There are feasible and still usable equipment that will not gravely affect your cash reserve and yet be able to deliver the service you need from such equipment.

Whatever current equipment or machinery you have that needs repair, does not need to be replaced right away. Repairs are less costly, and the cash outflow would not be as much if you would buy a new one. Upgrades to your equipment or machinery should also be carefully considered because this would entail a big cash outflow on the side of the business. No business owner would like to be deep in debt just because of an upgrade to a machine that is still delivering what its supposed to be delivering. However, if it is already absolutely necessary to upgrade your current capital equipment, there should still be careful planning about this huge expense and make sure that the business’s cash flow would not suffer in the long run. Cash flow management is also about ensuring that there is a good balance between the business needs and your external customers’ needs.

9. Increasing margins and sales and clearing out your inventory

Costing and managing inventory entail a lot of hard work and computations that is why these are specialized fields in your business’s finance team. As a business owner, you should be aware of the impact of setting a good margin for your sales in order to gain a reasonable profit from them. Increases in profit margins do not necessarily need to be too steep that you will end up having more in your inventory than having it sold and converted to cash. Profit margins are computed based on your cost of goods and inclusion of other business operations expenses such as labor, equipment, and other similar factors, and these are usually incorporated, too, in detailed cash flow management plans. The margins should be reasonable enough that you will be able to clear your inventory and restock and keep the cash inflow going. Along with this, you can drive your team to increase sales through promotions and giving incentives, not only

10. Build good connections and relationships with your vendors, suppliers, and contractors

It is important for the business to have good connections and relationships with its vendors, suppliers, and contractors for the very reason that they can give the business payment terms and lines of credit that are favorable to the business operations. The granting of favorable payment terms is essential in drawing up a cash flow management plan that would enable the finance team to forecast the business expenses and possibly be able to get discounted rates for their purchases from their suppliers. This will keep the cash outflow at a minimum and balance it with the inflow of cash from receivables and other sources of income or funding. In cases where debt management is a concern, having good relations with your vendors, suppliers, and contractors will enable the business to come up with terms of payment and schedules that will work for both parties. What a business needs would always be a win-win situation between the business and its vendors so that goodwill is maintained, and good business dealings will continue, thereby, contributing to a reasonable and positive cash flow for both parties.

At the end of the day, it is important for a business owner to be able to strike a balance between keeping a positive cash flow statement at the end of a given period and making sure that it will also be able to keep away from the hassles of bad debts and debt management. It may be hard to strike a balance between those two facets of business. If you have the right people and the right mindset, workable and viable cash flow management and debt management plans will not be hard to meet. The ultimate goal is for the business to be profitable with the aid of a feasible cash flow management plan to follow and to minimize or eliminate the need for a debt management plan in the long run.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post 10 Cash Flow Management Tips to Avoid Bad Debt in Business first appeared on Bizzloans Australia.

Before we go into a few details and tips on how to effectively manage your staff, we should be aware of the aspects of employee management in the organization.

Recruitment. An organization starts to get employees by recruiting and hiring the right people. It may be a very tedious process to go through resumés and credentials of potential candidates, interviewing them, doing background checks, among other things. But this step is crucial because if you do not get the right people for the jobs that are available it will cost the organization time, money, and effort. You would not want a high employee turnover rate especially for a job that is crucial to the operations of the business. More so, if you are going to hire a manager, these candidates should have work values and ethics that are aligned with the mission and vision of the hiring company.

Measurement. Organizations have set standards with the way that they do their business. The jobs of the employees also have standards which are set to be followed and done in order to meet the goals and targets for their respective departments and the organization as a whole.

Monitoring. Employee management entails constant monitoring of the staff and overseeing their work performance on a daily basis. This is another important aspect because you would need to ensure that your staff is doing their assigned jobs and duties right and as a manager, you will be there to guide them in making sure that the work targets are met.

Interaction. There should be constant and regular interaction between the staff and their manager as this is integral in making sure that there is an open line of communication within the department and organization.

Rewards and Recognition. Rewarding and recognizing employees who excel in their jobs is a definite morale booster. Management should never fail to recognize and reward deserving people in the organization for jobs that are well done. Appreciation of employee efforts will always be regarded as taking care of the people who are helping you stay in business.

Discipline. As it is best to recognize and reward those who are doing great in their respective jobs, it is also integral to have rules and regulations to follow and to instill discipline in the whole organization. It would be an effort in futility to run an organization without rules. Employees are still expected to exhibit excellent work ethics and keep a high moral ground wherever they may be in the organization.

With all the above aspects being discussed, here are a few tips on how to bring about effective staff management into your organization.

1. Communication is key.

An open line of communication between employees and their managers is essential to maintain effective staff management within the organization. It is vital in the passing of the right information and to ensure that the right directives are being passed on in order to meet the set goals and targets. Effective communication is not only about having a platform for your employees to discuss their ideas, thoughts, and even their complaints. This should be used to also get to know your staff on a more personal level to help the manager understand their individual needs. In turn, employees feel valued, and they feel that they are a significant part of the organization.

An open line of communication is also needed to be able to resolve conflicts and foster a more conducive and conflict-free environment for the staff to work in.

2. There is no clear-cut management style that will fit everyone in the team.

All managers and leaders have different management styles that they know will work for their respective departments and for the organization in general. However, there is no one-management-style-fits-all concept in a team with different backgrounds, beliefs, work ethics, and opinions. As there is no hard and fast rule when it comes to managing people, the manager should be able to adjust to the needs of his or her team when it comes to addressing concerns about their work. Each person has their own and unique way of doing their jobs, so it is the responsibility of the manager to make sure that they all meet halfway in getting a certain job done. There may be staff members that would require more training, others can work entirely with minimal supervision. Effective staff management requires sensitivity to the needs of the staff and making sure that everyone in the team would be comfortable working with each other.

3. Understand the organization’s financial aspects.

As much as managers must know how to manage people, managers should also know the financial aspects of the organization. The company hires the right people for the right jobs within the organization primarily because they need to earn and be profitable. They can pay their employees well because the company has more than enough financial resources to do so. Knowledge about the financial aspects of the business contribute to effective staff management by allowing managers to be able to set and align work targets and goals for their staff to contribute to the organization’s profitability and income.

4. Proper delegation of work as part of effective staff management.

We know that every department in an organization has several job functions and objectives with that one target of meeting the expectations set by the company. Managers hire the right people for the job and when there are other work-related projects that need to be accomplished, delegating people who are right for certain tasks is part of effective staff management. As a manager, he or she should know the capabilities, strengths, and weaknesses of each of his staff members so he or she would be able to give them the right assignments or tasks to get the job needed to be done on time and correctly.

5. Create a positive environment for your staff.

With all the pressures that work can bring about in the workplace, it is inevitable for people to become irritable or even get grumpy in between work. There are also certain instances when your staff can bring personal issues and concerns to the workplace that can impair their productivity during work hours. It is necessary for the manager to help create a positive environment for their staff to increase their productivity and ensure that they can do their jobs despite life’s moments outside of work. Positivity helps ensure that the employees are happy with their work and passes on a positive morale to the team to work towards achieving goals and reaching their targets.

6. Lay down clear objectives and goals to your staff.

As part of the open communication process, managers should be able to lay down clear objectives and goals to their staff. It is in this manner that the team will be able to plan and strategize the moves and work needed to be done in order to reach the goals and objectives of the team. It is essential for the manager to clearly explain to the staff what is needed from them so that if there will be any questions or clarifications, these will be addressed at the onset and the team will be able to work smoothly on the required job or project.

7. Support your staff’s career development.

Upon hiring, we all have that kind of expectation that we will be able to go up the career ladder and achieve a certain career development path. Most of us aim to be managers with hopes of getting a better pay, greater benefits, and other wonderful perks that may come with a higher responsibility in the organization. A true leader with effective staff management skills will help make those career goals of his staff happen for them. A good manager should be able to see the potentials of each of his staff members, hone these potentials to prepare them for bigger responsibilities, and hopefully get them promoted to their dream jobs. A leader who knows how to boost the morale of his staff by supporting their goals and dreams shows effective staff management in that way.

8. Feedback is important.

As part of effective staff management, employees would need to hear feedback just as managers would also need feedback from their superiors as well when it comes to doing their respective jobs. Providing balanced feedback will allow individuals to know where they are good at, what needs to be improved and addressed, and how they are doing within the organization. Individual coaching sessions are great avenues by which the feedback can be relayed. While feedback should always be constructive, negative feedback must also be addressed as well. In this way, room for improvement will always be available and both the manager and his staff will be able to work harmoniously together to meet their goals and objectives. It is important to note that the manager should be able to properly express and explain the feedback needed by the staff so as not to encourage bad vibes and negativity among themselves. There is always a better way to say things that would not sound too condescending and may offend other people. Again, an open mind and line of communication is integral in this process.

9. Set and lead by example.

Managers are looked up to by their staff so one should always set the bar and lead by example. This builds trust and confidence between the staff and the manager knowing that they are looking up to someone who has credibility and integrity. How can one demand timeliness from the staff if the manager is not meeting deadlines himself? How can one demand punctuality if the manager is always late for work? How can one implement rules and regulations to the staff if the manager does not follow them? How can you tell your staff not to bully others at work if you do it just the same? How can you demand good work ethics from your staff if you do not practice them yourself? These may be small things to others but the impact to the credibility and trust level to the manager is great. Just as parents are our role models at home, the manager should be the role model in the organization. A manager who leads by example is emulated and in turn, trust and respect are accorded to each other appropriately from within the organization.

10. Know how to manage conflict.

In as much as we always try to avoid conflicts within a team, there will always be a time that they would need to be addressed. A good manager and leader will never instigate a conflict. Effective staff management entails resolving conflicts from within the team. They should always hear all sides to a story, be respectful in hearing out the parties involved, have empathy and be understanding to all the statements behind the conflict. Resolving conflicts mean giving out fair decisions and maybe even to personally call out the individual who may be responsible for the conflict. No one should be put in an embarrassing situation just because of a conflict. The manager should be able to be an arbiter to the parties involved and do what is best to resolve the conflicts he or she is facing. At the end of the day, a fair handling of conflicts by the manager will put to rest issues among the team so they could work together efficiently and effectively, and with no personal grudges coming in between.

11. Monitor and appraise your staff’s performance on a regular basis.

Part of a manager’s job is to ensure that he or she is constantly monitoring the performance and progress of his or her staff on a regular basis. Performance monitoring and appraisal comes with parameters and key performance indicators for each individual member of the staff to know whether the employee is doing well with his or her job or otherwise. By consistently monitoring the staff’s work and performance, the manager will be able to gauge how well his or her team is doing. The manager will be able to see who is performing well, who deserves to be given tasks with greater responsibilities, see those who can help others from within the team reach targets, among other things. Through monitoring, the manager will also be able to see areas of concern that needs to be addressed, put in place performance improvement plans, when necessary, and maybe carry out alternative methods to reach key performance indicators as deemed fit. Individual coaching sessions must be done on a regular basis as part of effective staff management to make sure that the staff is still working towards one common goal from within the organization – that is, to get the jobs done properly and to meet or exceed expectations from them.

 12. Know how to acknowledge good work done by your staff.

A leader who acknowledges the good work of his staff provides them a sense of value within the organization. It is especially important to acknowledge excellence and hard work put into the organization because this drives the staff to do their jobs better with the vision of not just meeting expectations but exceeding them. This will positively reflect not just on the manager but to the whole team as well.

13. Recognize and reward your staff.

Every employee in a company works hard so that they can support and fend for themselves or their families. And every employee deserves to be recognized for a job well done. When an employee exceeds what is expected of them, it is because they worked hard to achieve those goals and targets. Being recognized and rewarded for an excellent job performance gives the employee the morale booster that he or she needs to keep going to work and to contribute to the organization’s future. This also encourages and inspires other employees to work harder for themselves and for the benefit of the organization.

14. Celebrate your staff’s success.

Whether a project has been completed or maybe someone in the team is celebrating an important life event, managers must celebrate every success that his or her team has brought to themselves because the success of one is the success of everyone in the team. Knowing how to celebrate milestones is a way to keep your staff inspired to do more of their work.

15. Empower your staff.

How great it would be to know that your manager knows how to empower his staff to do things for the benefit of their team. When the manager acknowledges and recognizes the staff’s individual abilities and strengths, when the staff can make decisions for the team, the staff feels empowered and valued. This encourages the team to do better and meet all the expectations that are set for them.

Effective staff management requires a great deal of technical and financial knowledge, sensitivity to the needs of the individuals within the staff, and positive human interaction in order to ensure that the team will be able to have a harmonious and productive working relationship with each other within the organization.

CLICK HERE TO GET A FREE QUOTE

Share this article

• Facebook
• Instagram
• Twitter
• LinkedIn

The post 15 Tips Towards Effective Staff Management first appeared on Bizzloans Australia.