The idea of starting a small business is exciting. If you have a concept in mind for a product and you have the know-how to produce, market and sell it, you have the potential to make some serious money. Except here's the rub - statistically, in Australia, the odds are against your company's long-term success.
60 per cent of Australia's small businesses are forced to cease operating within their first three years.
According to the Australian Bureau of Statistics, 60 per cent of the nation's small businesses are forced to cease operating within their first three years. Your business idea might be a great one, but pitfalls await you nonetheless.
One way to sidestep them is by ensuring smooth cashflow.
Better cashflow for a better business
So what is it that causes companies to fail in their early years? Often, the problem is sluggish cashflow. The Australian Securities and Investments Commission revealed data showing that 44 per cent of failed businesses blamed poor strategic management, 40 per cent had inadequate cashflow and 33 per cent suffered trading losses.
The thing is: All three of these problems are all interconnected. If your company is managed poorly, it's unlikely to have solid strategies in place for collecting payments and maintaining cashflow. With poor cashflow, your company is sure to post losses. If your organisational leadership makes collecting cash a priority, the positive ripple effect can solve several problems at once.
Seizing control of your accounts
As you look to address your company's cashflow troubles, the first order of business should be to manage your accounts better. If you have a lot of unpaid invoices on file, what can you do to tighten up your processes and get customers to pay what they owe earlier?
Business Queensland notes that the opposite strategy can also work - instead of taking money in faster, you can also control the speed at which you spend. By negotiating longer payment terms with your suppliers, you can avoid having to dispense with cash before you're ready.
Debtor finance might be the solution
If all else fails, there is one additional way to combat cashflow problems at your place of business, and that's by acquiring debtor finance. With debtor finance on your side, you can improve the consistency of your company's cash flow right away.
Whatever amount of receivable cash you have, we can give you quick access to a hefty percentage of that figure. You can turn around and use that money instantly for whatever you desire - paying your bills, doling out paychecks or improving your business for the future. The choice is yours.
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].