In a family business, there are likely to be a range of different challenges that come with managing and growing your operations. Not only do you have to handle all of the issues that come with a company, there are also the risks that come from working with family members.
While these challenges are considerable, one of the most permanent issues is likely to be the question of funding. After all, family-owned companies will not have the same access to capital and resources that larger firms enjoy.
This hasn't stopped family companies from pursuing greater funding opportunities. In fact, KPMG recently found that 60 per cent of Australian family businesses are currently looking for external sources of financing.
Part of the reason for this is likely to be the significant growth that family businesses are seeing in Australia. PricewaterhouseCooper's (PwC) family business survey found that 16 per cent of family businesses are expecting to expand aggressively in the near future, with a further 70 per cent forecasting average growth.
While family businesses are clearly interested in pursuing greater expansion and access capital at the same time, one of the biggest challenges for small firms is likely to be cash flow. After all, accessing external capital isn't going to be effective if small firms are struggling to receive invoice payments.
In the PwC survey, this was evident, with 26 per cent of family businesses concerned about cash flow, above the global average of only 17 per cent.
Many family companies may even find that if they could increase the inflow of cash from existing invoices, they would have adequate financing to pursue greater growth without needing external finance at all.
One solution to this problem is debtor finance, an option which lets family businesses receive funding for unpaid bills, without having to chase them up themselves. This can help family businesses secure a steady revenue stream and focus on growing their market presence.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].