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Your business resolutions for 2007

Save money, manage money - your business resolutions for 2007

Are you a month into your 2007 diet and sick of rabbit food? Or perhaps you're starting to get fed up with spending ending every weekend in front of 'Dancing on Ice' in a bid to stick to your New Year's resolution and save some money.
Well 'no pain, no gain' and if you are having to be disciplined why shouldn't your business?

The interest rate rise, which took the basic rate up to 5.25 per cent, has left many businesses feeling the pinch in 2007 and starting wonder how they will afford monthly repayments on loans and mortgages etc.

Well there are a number of things small businesses can do to save cash and minimise the impact of the base rate rise on their business:

Take a fresh look at your current outgoings, see if any new savings can be made.
Shop around for loans and mortgages to see if a lower-interest deal is available and consider changing your insurance policy if you come across a cheaper quote with your required cover levels.

Similarly, take a fresh look at your bank account. Could moving your current account save you money?

Adopt some energy-saving principles, businesses can usually save money with a bit of attention and some modern technology. There are a range of inexpensive habits from light bulbs to insulation that could potentially save you a tidy sum each month.

You should also consider changing your energy provider, there can substantial differences between the most and least expensive providers - as well as many incentives for changing.

Take steps to avoid late payment. If you haven't already done so, outline your credit terms to your customers. Chase up your debtors with renewed vigour, and although most businesses don't exploit this fact you are legally entitled to charge interest for late payment. Run credit checks on new customers to prevent the problem from happening in the future.

If you take avoidance steps but still suffer as a result of bad debtors, consider employing a factoring service who will give you access to money instantly and do the chasing of unpaid invoices for you, leaving you to run your business. Learn more here.

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Now you have minimised the cash flowing out of your business, have a look and see how you can better manage the cash 'in' your business.

According to Onstop.co.uk, a company established to help businesses solve their cash flow problems, good cash flow is of paramount importance, particularly if the business in its first year.

The company believes that the following tips can help to promote effective cash flow management:

Make sure your income and expenditure records are up to the job. If you can see quickly and easily which customers owe you money and whether you are spending more than you should be, you are halfway there. An invoice book and records of payment can easily be set up on an Excel spreadsheet, once set-up can be maintained in minutes on a daily basis.

Budget carefully. Planning your spending in advance will enable you to make sure you do not spend more than your business can afford to. Your proactivity will give you time you didn't previously have to research the best value for money suppliers.

Build good relationships with your customers. If you build and maintain good relationships with your customers, they will be more likely to pay you on time, as well as being more loyal to your company.

Make sure you are aware of your break even point. This is the point at which your income and expenditure are balanced and will determine whether or not you are in profit or making a loss.

Pay your own bills on time in order to preserve your good reputation and to put you in a better position to negotiate good payment terms. However, do not pay them before they are due as this could impede your own cash flow and leave you in financial difficulties.