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Restructuring your business to improve cash flow


Maintaining a successful business is incredibly hard work, unless you put in the time and effort, running a business will not be easy. It doesn’t matter if you run the market place, or you’re well settled, every so often things need a freshen up. Perhaps your business processes have become obsolete, tired, or perhaps there are just more efficient ways of doing work. 


Restructuring a business is never easy, nobody likes change. However, sometimes if you don’t restructure you can get left behind and not keeping up with your competitors could spell disaster. One of the key factors you should consider when thinking about restructuring, is not the potential cost, but the cost to your business if you don’t restructure. If things go really wrong, you could see creditors send winding-up petitions, or in the worst case scenario, see a liquidation.

Planning your changes

Restructuring is always important, but unless you have a clear strategy of how and where you can improve, there’s not much point in doing so. Have a look through all of your business processes, all of your departments and see where improvements could be made, either through staff training, equipment or methods of production.
Although new equipment could be a significant outlay, you must consider the potential costs of inefficient production. You may have an excellent workforce, but if they don’t have the right equipment, they won’t be able to produce to their full potential.

Keep investing in your staff

Staff are perhaps the most important asset for any business. Without a workforce, a business simply wouldn’t work and wouldn’t exist. Staff are perhaps the most important part of a successful working business and having a clear structure for your staff, with room for improvement is vital. Employees want to know that hard work will see them rewarded and that there is room to develop and progress.
A business should give credit where it’s due, but having the correct structure in place to reward staff is vital. Rewarding staff, investing in staff training and making efforts to improve morale will pay dividends to productivity. If all staff feel valued by a company, they can effectively become ambassadors and will always be looking to do their best for the business.

Structure your incomings and outgoings

By planning your incomings and outgoings effectively, you have a much better chance of managing cash flow efficiently.So what are the best things you can do?
·         Make it business policy to get the best possible clients. Assess their credit history and look at how reliable they have previously been in terms of paying invoices.
·         For the clients who still can’t pay on time, ensure that you follow up on late paying clients. There is no harm in giving reminders to clients with a simple text or phone call that they need to pay you.
·         Ask for a deposit – up-front deposits can help bring in cash quickly and ensures that the client will at the very least be paying something.
·         When it comes to your own outgoing payments, if it’s needed pay on the last day of a contract. If you have a 30, 60 or even 90-day contract repayment terms, if it can benefit you better, pay later.
·         Be honest with your suppliers – Suppliers are a vital cog of any business and they will want you to succeed. If you are having trouble with paying them, be honest and see what sort of arrangement you can come to.

Use commercial finance to give you that extra boost

If restructuring doesn’t work for you and bring in the extra pennies to help keep your business going, commercial finance can be an excellent means of giving your cash flow that injection it needs. Commercial finance could also give you the means to restructure, you may need to change your business processes, but don’t have the funds to put the action into place.
Asset finance and hire purchase are certain types of commercial finance, which give you the option to get your hands-on top of the range equipment without having a large outlay of expenditure. Although there is the cost of paying monthly fees, what’s more important is deciding what you could lose in productivity if you don’t have the best equipment.
If you need to move offices, or buy a new commercial property, a bridging loan could be the ideal solution. They are a specific form of commercial finance, which effectively bridge the gap between the sale of your own property and the purchase of a new one. So, if restructuring involves moving to a better space a bridging loan would be the top finance product.

In summary

When it comes to making any business decision, it requires time, dedication and a long thought process. However, your business structure has to be carefully considered and the consequences for not making any changes could be bigger than if you don’t make any changes.
Restructuring your business to improve cash flow Restructuring your business to improve cash flow Reviewed by RAWAT on 4:28 AM Rating: 5