In today’s ever changing economy; the global growth should average 3.4% compared to last years 3.2% according to the IMF (The International Monetary Fund), interest rates can fluctuate and this too can have an effect on businesses monetary needs. However, there are ways/remedies to deal with the cash flow trauma. Here are a few tips that I believe are effective and helpful.
1. Always think ROI. Whether you are a Sole Trader, a Limited Company, an SME or any other type of business you should always think of a Return of Investment. You should look at the estimation of the return you get for the money you spend i.e. if you spend £1 and only expect 80p back you are spending more so re-allocate your spend. Steer it to a more profitable direction.
2. Income and Expenditure Form (I&E). I learned about this productive tool when working as credit recovery officer a few moons ago. This is basically a document or even just a sheet of paper where you draw up your monthly or weekly incomings and outgoings and the amount left over can be saved. The I & E form can also be an indicator into if you are over spending.
3. ISA account – from the savings left from the I&E form, this can be put into an ISA account and generate more interest over time. In the long run, this saves more money.
4. Be SMART – Your objectives should be:
Specific – be clear what do you want to achieve.
Measurable – establish quantifiable measures i.e. increase sales revenue by 10%.
Agreed – objectives should be agreed with all parties involved.
Realistic – set achievable objectives and ones that are within your control.
Timely – progression, completion dates; all need to be specific.
“Balancing your money is the key to having enough”~ Elizabeth Warren