The start of a new financial year is a great time for business owners to consider how they can ensure the next 12 months will bring sustainable business growth and financial security.
With your latest accounts in front of you, there’s no better time to ask a few key questions about your business’s financial performance and look for easy wins that can make a huge difference to the bottom line.
Track These Crucial Business Metrics in FY20
It’s important not to neglect any of the three key business metrics: profit, cash flow, and growth.
Growth that is unprofitable is a negative for your business; on the other hand, profitable businesses with poor cash flow or no income prospects can easily spiral into financial difficulties.
Look at these metrics in last year’s accounts, and compare them to previous financial years.
Tweak Your Profit Percentage
If you haven’t done so for a while, take a look at your regular outgoings: can you get a better deal on your commodities supply or your insurance?
On the other side of the balance sheet, it’s probably time to put your prices up. Most successful businesses do this once a year — either in January or for their new accounting period — and customers won’t begrudge a reasonable rise provided you have kept them happy.
By tweaking both sides of the balance sheet in your favour, you can significantly grow your profit margin.
Invest in Customer Service and Marketing
Good customer service and marketing are two ways to ensure your business remains on a sustainable growth trajectory in the year ahead.
Good customer service leads to great customer satisfaction. Improving your customer service ensures you retain your current customers and makes it more likely that they will increase their orders.
Marketing is the obvious way to reach and acquire new prospects at a reasonable cost. Digital marketing is an efficient way to target the right audience. You can drive leads for the business whilst managing your spend. However, you still need to account for this expenditure in your cash flow planning.
Better Cash Flow Holds It All Together
Too many businesses forget about cash flow, but it is essential. Money is the lifeblood of the business, and it is the master key that unlocks greater opportunities. On the one hand, bad cash flow management can put even profitable businesses into financial difficulty — and the danger of this is heightened during growth spells.
Good cash flow management, on the other hand, saves you a lot of money. Instead of paying interest on business loans and overdrafts, you can use your own money to finance your plans.
Cash flow finance, supply chain finance, and trade finance are all business funding solutions that improve your cash flow situation while simultaneously injecting cash into the business.
If you want to know how your business can use these products to access working and growth capital and improve its cash flow management, get in touch with OptiPay: our skilled advisers will show you how to get tomorrow’s cash flow today and ensure a prosperous and secure FY2020.