The number of companies going into administration is on the rise.
Take for example the high street, well known names, that have gone in recent months - Mothercare just this month; with rumours rife that many other familiar high street brands are on the brink of closure.
So why is this happening? What can we learn from it in a bid to protect ourselves?
Well, for most businesses and SMEs, the largest cause of failure is the lack of cashflow.
Lack of cashflow is crippling. It sucks the life out of a business and it can make it impossible to manage day to day overheads, let alone grasp expansion opportunities.
Another big reason is companies are not moving with the times. They don’t review their business plan or day to day operations.
Their business model may well have been on point several decades ago, yet in today’s society, with savvy millennials, both in a business buyer and consumer capacity, their buying habits are changing.
As a business you can’t afford to stay stagnant. You need to keep an eye on the forever changing habits of your customers. Keep a close eye on your competitors too. Don’t be afraid to pick up the phone and talk to your customers – go and see them, host forums about new product development etc.
Don’t be afraid to change your business plan – nothing is ever carved in stone, it’s far braver to concede to change than ignore the changes surrounding you.
Discounting shouldn’t be your only option – reinvent, adapt, find a niche. This then gives you reasons to market your product; not only with a new message but to a new target audience.
Look at suppliers too – can you rent seasonal machinery rather than invest in expensive items that are rarely used? Can you arrange better terms, if you’ve got the working capital, if you buy in bulk?; and so bringing us right back around, full circle to cashflow again.
Without cashflow you have nothing, because, let’s face it you’ll always have late paying customers, however successful you are. Invoice finance takes away the burden of late paying customers and instead gives you fluid cashflow advancement on all issued invoices.
Talk to us about how we can advance you up to 90% of each of your issued invoices, within 24hrs, paying you the balance when your customers pay their invoice. As the UK’s most popular form of alternative finance, join over 40,000 other UK businesses enjoying financial stability through invoice finance.
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