Losses are a part of any business. In some months, they will be significant. It others, they might not be a concern at all. However, not paying attention to losses and the source of them can lead to disaster. Whatever the state of your business at the moment, protecting against loss is the surest way to make your company as future-proof as it can be. Follow these tips and nurturing your small business into growth will be much easier.
1) Keep track of your cash flow
Mismanaged cash flow is one of the biggest reasons so many small businesses tend to go under today. Beside your business plan, a cash flow plan should be the second most driving document for running your organisation. Keep track of all your loans, payables, cash sales and the various other financial elements of your cash flow. Projecting income and costs can not only give you the right data for future investments and loans. It can also help you spot gaps in your current plans leading to less loss.
2) Get training in loss prevention
If you’re providing a product or a service that relies on physical goods, the chances are that this has already been a major source of loss. Investing in loss prevention is always a good idea. This is the same whether it’s hiring someone experienced in the field or training up your already existing staff. Tightening security via loss prevention has immediate effects. Plus it will result in a stronger business overall.
3) Track down money that’s slipped away
It’s a very common risk for small businesses that get paid through invoice. Amidst running the organisation, you might have very well missed that an invoice or two hasn’t been paid yet. The unfortunate truth is just that some are unwilling to part with their cash quickly or have forgotten. Whatever the reason, this is not a loss you can justifiably let go. Mitigate the losses from unpaid invoices by using Invoice Finance. This tides you over whilst you track down all those unpaid invoices.
4) Insure key parts of the business and workforce
It’s an old story. A small business crumbles because a key member leaves or an important aspect stops working for a week. The truth is there are disasters that might strike at any moment that you have little power to stop. However, we can predict which parts of our business are supporting the whole structure. From this, we can protect ourselves against any damage caused by their potential unreliability. Learn more about business insurance and which most applies to your current model. Be prepared to change that model in advance so the insurance covers a planned road to recovery.
Losses and disasters are unavoidable in business. You never know what kind of luck you’re going to have or what factors might be siphoning money from your finances. The important thing is that we prepare for these potential pitfalls. This preparation can be the difference between a hard period for the business and the end of it. If this has been helpful, consider reading this guide on more risks in a start-up and how to lower them.
