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Category - Financial Management

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1
Managing A Mature Business – Managing Cash Flow
2
7 Ways Of Financing A Small Business
3
A 5 Day Challenge To Master Your Business Finance
4
Why Understanding Finances Is The Secret Ingredient
5
7 Financial Measures To Help You Manage Better

Managing A Mature Business – Managing Cash Flow

This is the first in our series of blog posts about Managing A Mature Business.

In case you missed it, we completed a set of 7 posts about Starting A Small Business, from making sure you know your Purpose to how to start up, to preparing a feasibility check, planning and hiring your first employee, and you can catch up by going to teikoh.com. We have also just completed another 7 part series on Growing Your Business from learning about Key Performance Indicators for your growing business to marketing, working with employees and making sure you have the systems to scale. You can also look for it on our website at teikoh.com.

In a business, at any stage of its life, cash flow is an extremely important part of that business’ lifeline and will always need to be managed.

However, in a mature business, the cash flow pattern is more challenging. The business is no longer growing, in some cases it is stagnant and while you may have reduced investment needs, the cash that is generated through a mature and stagnant level of sales may not be replenishing the “catching up” of cash outflows that you were experiencing before.

There are four stages of a business cycle, being startup, growth, maturity, and potentially decline.

In the startup stage, sales are low in volume but grow quickly. In the growth stage, sales are beyond the break-even point and both sales and profits are increasing. In the mature stage, the rate of growth slows down and cash flows become relatively stagnant.

If you are not managing your cash in maturity, in order to invest in innovation and new products and services to kick off the next growth phase, you may enter the decline phase where all sales, profit and cash flow decline until you exit the business.

Read More

7 Ways Of Financing A Small Business

Whether you are starting your small business, or planning to invest to grow an already existing business, you will come to a time when you need to find extra cash.

Here are seven ways you could finance your small business.

But first, we should discuss the good and bad reasons why you are seeking the extra cash to invest in your business.

Good reasons to invest in your business include starting a business with a proven market or product and expanding a profitable business. Starting a business with a totally new idea is riskier, so if you are borrowing money or investing your own savings, you should be aware of the higher risk involved.

Read More

A 5 Day Challenge To Master Your Business Finance

In 40 years of advising small businesses and helping them grow, I have noted that the most successful small businesses to 6 things really well:

  1. They show and encourage leadership within the business;
  2. They make planning a habitual practice in the business;
  3. They are always marketing;
  4. They ensure that their customer enjoys a fulfilling journey through their business;
  5. They have made their processes and operations efficient; and
  6. They do not neglect to understand their finances.

This week I’m going to talk about finances.

But I’m not going to teach you how to be an accountant!

I’m going to tell you why you cannot neglect the skill of understanding your finances and then set you a challenge that will show you how to cheat your way to mastering your finances!

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Why Understanding Finances Is The Secret Ingredient

I’m going to talk about finances.

Stop!

Don’t delete the email or close the window! You really need to hear this, and I promise it won’t be boring!

OK, jokes aside, unless you are a finance specialist like an accountant or a bit of a numbers nerd, finances usually make a small business owners’ eyes go blank.

That’s understandable because if you are like most small business owners, you started your business as a subject-matter expert. You knew your stuff, that’s why you had the confidence to start your own business. You knew that at worst, you could back yourself on selling what you know. But you’re an intelligent person, so you realised that running your own business wasn’t like working for the man, where all you had to do was show up and do your stuff. That’s why, to your great credit, you end up reading websites or newsletter like this.

You knew you had to find out about business planning, you had to know about marketing, you had to find the sales prospects and work out the best and most efficient way to supply what you supply. You had to hire staff and then manage them.

And, you had to manage the finances.

Like most people who are not finance trained you probably bought software that was hopefully easy to use, and you copied the data at the end of the year and gave it to your accountant. As soon as you could afford it, you hired a bookkeeper and handed the operation of the accounting software to her.

I don’t like to tear you down, but that’s not good enough.

Here’s why. Read More

7 Financial Measures To Help You Manage Better

If your small business is in the growth phase, that means you have survived your startup phase and are on your way, so well done!

The growth phase of a business is characterised by a rapid increase in sales. Customers have become aware of your business and know how your product or service meets their needs. So, they buy more and more, and more of them come to you, at least to try you out further.

However, I have to rain on your parade slightly to tell you that the growth phase of a business can be stressful times.

This is because the characteristics of the growth phase poses a number of challenges.

Read More

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