Now that over half of UK adults have already had their COVID vaccine, as business owners have, we considered what would a vaccine for our businesses attempt to prevent?
We have outlined some strategies that you might like to consider that would help you thrive coming out of lockdown:
Lease, Don’t Buy
Since leasing supplies, equipment, and property usually ends up being more expensive than buying, so may seem counterintuitive. But unless your company is flush with cash, by leasing, you pay in small increments, which helps improve cash flow. An added bonus is that lease payments are a business expense, and thereby can be written off on your taxes.
Offer Discounts for Early Payment
Everyone loves an incentive, and if you offer discounted fees to clients that pay their bills ahead of time, you’re creating a win/win situation for both of you, your client cuts costs, and you help keep a positive cash flow.
Conduct Customer Credit Checks
If a customer is looking for extended payment terms be sure to conduct a credit check before you agree contracts. If their credit is poor, there’s a real risk that you won’t be receiving payments on time, so you need to factor that in and try and set up their payment with a direct debit.
Improve Your Inventory
Review the inventory of goods you buy that aren’t moving at the same pace as your other products. Instead of buying more of what doesn’t sell, get rid of it—even if you need to sell it at a discount. Be objective, not emotional.
Send Invoices Out Immediately
There’s no point doing the work if you don’t send out invoices promptly. Invoices should be easy to read with terms clearly stated. Ensure that the due date is highlighted and include clear instructions regarding payment types accepted.
Pay Suppliers Less
If you maintain friendly, regular communication with suppliers, you will have a better chance of landing better terms with them. Offer suppliers early payments if they’re willing to give you a discount in return.
Upsell
Very few businesses only sell one product or service, so review your existing client relationships and see if you can encourage them to spend more with you. New clients are normally more expensive to service, so this is an easy way of increasing your turnover, average spend per client and profitability.
Increase Pricing
Increasing your prices is a concept that scares many business owners. They’re worried it will lead to reduced sales. But it’s OK to experiment with pricing to find the perfect number—how high are customers willing to go? There’s no way to know unless you take a chance.
While implementing some or all of the steps outlined should help you increase your overall business health, for the perfect vaccine, you’ll also want to make sure you’re making the right decisions regarding your marketing, customer service and product or service development.
That’s where we come in. As experienced accountants who offer a range of business growth services, we’re here to help you review your business plan on a regular basis to ensure you anticipate trends and challenges before they impact your profitability.
Please get in touch so that we can help you make brilliant business decisions. Or follow our LinkedIN page to stay up to date with us.
