3 signs that you are ready for your next goal
As an entrepreneur you are full of ideas and plans for your business for more detail shlomo rechnitz. But… how can you be sure you’re ready for your next business goal? Following your entrepreneurial spirit is important, hard numbers help you take the right steps to grow. What signals can indicate that you are ready to grow with your business?
1. Your financial position looks good
Your finances are an important indicator of the growth of your business. Therefore, keep an eye on your profit and loss account and your cash flow development, among other things. Do you have high profits? That does not necessarily mean that you are ready to grow with your company. For example, if you make the same amount of profit for years , your business may be at a standstill. That is why it is important to also look at the nature of the turnover and to keep an eye on market developments. Rising revenues or sales can be a sign of growth, especially for younger businesses that are constantly building more sales and may not be profitable for a while.
2. Your cash flow improves
While healthy cash flow doesn’t always correlate with business growth, it does suggest that your business is in a stable financial position. Positive cash flow is the result of lower expenses, increased sales, or a combination of both. And good finances are often the basis of business growth and give financiers confidence.
3. You run out of stock quickly
Are you running out of stock quickly? Then this is a sign that there is a lot of demand for your products. When you need to reorder items quickly, this can be a result of more sales and an expansion of your customer base. Compare the inventory turnover rate with the national average in the industry in which your company operates. A turnover rate above the industry average can mean growing demand for your products. However, if the turnover rate is significantly higher than average, you’re probably not storing enough inventory to keep up with sales. If you sell your stocks quickly, it is generally good for your liquidity.
Tip: Have you organized your stock smartly ? With smart stock management you prevent storage costs, ensure more turnover, better margins and satisfied customers.
Payment terms for SMEs: the 3 challenges for entrepreneurs (and tips)
From 1 July, the maximum statutory payment term from large companies to SMEs has been halved to 30 days. Faster payment is becoming the norm, which is good news because late payments can, among other things, mess with your working capital and cash flow. Of course you also want to pay your suppliers on time. These are the 3 challenges you encounter as an entrepreneur.
As an entrepreneur, you want to feel comfortable financially and focus on growing your business. Smooth debtor management helps with this, but it is also nice if your debtors pay on time. MKB-Nederland has made considerable efforts to achieve a shorter payment term. Chairman MKB-Nederland Jacco Vonhof: “Just getting your money on time is extremely important for entrepreneurs, and especially now.”
Challenge: Your cash flow fluctuates strongly
When you have to wait longer than expected for debtors , that is annoying. After all, you run the risk that you do not have enough money in cash to meet short-term financial obligations. It is also possible that your company is growing faster than expected or that you notice that you are increasingly calling on your reserves.
To remain financially healthy, it is therefore important to keep your liquidity up to standard. With good liquidity you can keep your eyes open for growth opportunities. In addition to smooth debtor management, see whether you have organized your stock efficiently enough. This way, money will not be stuck in your stock unnecessarily.
Challenge: Your money is tied up in accounts receivable
If you have large debtors, a shorter payment term is good news and you are better protected as an entrepreneur. But even if you do little or no business with large companies, it is of course nice if your debtors pay on time and you do not have to bridge a payment term.
Late payments can directly affect the financial health of your business. Make sure you invoice on time and make clear agreements about the payment term. It is also good to check the creditworthiness of new customers. This way you reduce the risk for yourself that you have to wait (too) long for your money. When you work with multiple suppliers, you also make yourself less vulnerable as an entrepreneur.
Tip: Have you ever thought about automating or outsourcing your debtor management? Ask your financial adviser about the options such as Debiteuren Krediet New10 or Quickly Paid from ABN AMRO .
Challenge: You don’t have enough working capital left to grow or pay your invoices on time
To keep your business running smoothly and to meet your daily financial obligations, you need working capital as an entrepreneur . You will have to find the right balance in this. Having a lot of working capital does not necessarily mean that you have room for growth. When your money is tied up in your debtors, you cannot invest it.
Attracting financing can help you realize your growth plans and respond quickly to opportunities you see. For example with working capital financing. To determine whether this is a good time to attract financing, it is important to clearly map out your financial situation. A financing budget helps with this.
My name is Emma Perez, and I have a keen interest in the field of writing. I have written a couple of articles on various gemstones, fashion and would love to express my opinion on more such stones. Hope it has maximized your knowledge of gemstone jewelry and satisfied your quest to buy turquoise jewelry from an authentic place. We believe in quality and offer the same in our information and products.
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