Cash flow management can be a struggle for small businesses. We’ve compiled our top tips for 2022 to set you up for success.
For businesses, learning to juggle money management alongside building a company is tricky. How you manage cash flow could be what makes or breaks your brand. Set yourself up for success by planning ahead with our handy tips.
Whether you’re an online influencer, self-employed professional or business owner, money management simply comes down to monitoring your financial affairs. For these professions, this can be difficult as financial influxes can be irregular and come from multiple streams of income. We know that managing VAT on top of this can seem like a lot to take on, so we’ve put this guide together to give you a few ways you can start managing cash flow and stay organised.
Profitability could be a top priority. Although starting your business can be the result of a passion project, to sustain it and not make a significant monetary loss, you need to place some focus on your profits.
To do so, start by reviewing your finances and seeing where your business could potentially cut costs. You could also review business processes to see if changes could be made to use people’s time more efficiently, consider your pricing or balance out non-billable work. Set ambitious but achievable goals and milestones so that you and your team remain encouraged.
Prioritising profitability can effectively give your business the means to invest in its people, training, technology and working spaces, and can drive your brand forward, so ensure you make time to consider it!
Consider cash flow changes
If you’re sending goods to fulfilment warehouses or 3PL facilities in the EU, you will need to be mindful about cash flow and planning for potential delays. As your goods will be on route to the facilities and will need to be sorted to begin selling, you may experience a time delay between sending and selling. You will need to have enough funds to cover this investment over this period if you need to make any business payments or cover other outgoings.
This can also apply to you if you sell via a marketplace and use their fulfilment service to reach customers in the EU, for example Amazon FBA. You may experience a small delay between sending goods and when you start selling so make sure you have enough to tide you over until your inventory starts flying off the warehouse shelves!
Plan for the saleability of your business
For some business owners building their brand, considering the saleability of it is a distant thought on a faraway horizon. However, thinking about how attractive your business is to potential buyers can be useful from the start, to understand how to set your business up to generate the most profit for both present you, and future you. Considering the factors that improve the sale price of your business down the line is an excellent way to ensure you get as much value as possible if you decide to sell.
Reach out to finance experts
There’s no shame in getting a little help from the experts! Finance professionals know their stuff and sometimes making an investment in getting things right the first time can set your business up for long-term success. There are lots of affordable companies offering brands of all sizes financial advice to help you in areas that you may not be sure of like managing cash flow.
Set aside funds for growth
After you’ve paid your team, your business expenses, any bills and finally yourself, it can seem like an unattainable goal to set funds aside to invest in growth. It’s important however to know that investing in the future will only add value to your business, so setting aside some money, no matter how small, each month will be worth it overall.
When you have a growth fund set up you can then start to plan for ways to boost your brand and get noticed. This could be through paid advertisements, forming strategic partnerships with other brands, or utilising customer management systems.
Simplify your VAT returns
At SimplyVAT.com we’re in the business of making VAT easier for businesses. VAT can be a tricky topic for many brands, but we work to make this process as simple as possible. If your brand sells goods or services cross-border in the EU you may need to register for VAT, and we can help with that! We can get you registered for VAT in the Member State you require and file your VAT returns for you, so you can concentrate on managing not only your finances but also your business’s global expansion.
If you’re unsure of your international VAT obligations, or would like to get VAT registered, fill out the form below and a member of the team will be in touch.