Top Business Tips

This new section on our website offers top tips on different business issues. They have been written by Business Link for London Business Advisers who have specialist knowledge and experience.

Top Finance Tips 

Top Export Tips

Top Tips for a Changing Economy

 

Top Ten Tips on Finance

By Nigel Lander – Finance Business Adviser

  1. The finances of a business are only the ‘maths’ of every thing else that happens within it. Manage them as actively as you would all other aspects. Do not leave solely to third parties to sort out for you.

  2. Turnover is ‘vanity’, profit is ‘sanity’ and cash is ‘reality’. Businesses fail because they run out of cash before losses take them down. Manage your cash flow. Chase your debtors. Businesses that have a structured approach to credit control ARE proven to be more successful at collecting their debts.

  3. Ensure you plan. Know the needs of all the ‘Stakeholders’ in your business and the effect they can have on your business. Ensure you meet their needs. Do not ignore them or keep them in the dark. Organisations like the banks and the Inland Revenue  will be more prepared to help if you keep them involved.

  4. Monitor sales figures regularly comparing them to the previous months and the previous years. Check for variations and know why they have occurred. Do more of what was successful.

  5. If possible understand the contribution you get from individual products or groups of products. Consider stopping or changing those that are unprofitable.

  6. Compare your variable costs regularly against your monthly/quarterly sales figures (See above). Are they going up meaning gross profit going down? If so do prices need to increase? Are raw materials, wholesale prices or costs of production including labour going up? Manage them proactively.

  7. Remember often costs can be taken out of a business quicker than sales can increase. Monitor your fixed costs against your sales figure. This indicates how ‘effective’ the business is.

  8. Expanding businesses need more capital or their existing capital needs to work more efficiently. Understand your capital needs, both in terms of fixed assets and working capital.

  9. Businesses are financed in three ways, a capital injection, retained profits or borrowing. Ensure your drawings or dividends leave enough capital in the business to finance any expansion needs.

  10. Finance providers work in partnership with their clients. The first aspect they look at is the management of the business. They will be reluctant to support you, if you cannot convince them about your management skills.

If you want to find out more about financial planning for your business you may be interested in our events Key Financial Skills for Managers and Year End Tax Planning.

 

Top Tips on Exporting

By Richard Higgins – Trade Partners UK

  1. Obtain qualified export counseling and develop an international marketing plan, which will clearly define goals and objectives. This can be obtained from expert staff in the International Trade Team at Business Link for London.

  2. Secure a commitment from top management to overcome the initial difficulties and financial requirements of exporting. Although the potential problems and costs involved in exporting may seem difficult to justify in comparison with established domestic sales, the exporter should take a long-term view of this process and carefully monitor international marketing efforts.

  3. Establish a basis for profitable operations and orderly growth. Although no overseas enquiry should be ignored, the company that acts mainly in response to unsolicited trade leads is trusting success to the element of chance.

  4. Take great care in selecting overseas representatives. The exporter should make sure that a legally binding agency or distribution agreement is signed. Treat international representatives on an equal basis as domestic counterparts.

  5. Do not assume that a given market technique and product will automatically be successful in all markets. What may work in the UK may fall flat in France. Equally what works well in France may not in Japan. Each market has to be treated separately and thoroughly researched. The Trade Partners UK website is a very good starting point for your research.

  6. Be willing to modify products or service offering to meet regulations or cultural preferences. Local safety and security codes as well as any import restrictions cannot be ignored.

  7. Produce product/sales literature in the local language. It gives potential buyers a sense of commitment from the exporter.

  8. If necessary provide readily available support or servicing for the product or service.

If you want to find out more about exporting you may be interested in our events Developing Your Business Overseas – Winning Business from the United Nations.

 

Top Tips for a Changing Economy

  1. Understand your customers, their markets and their likely needs. Also identify profitable and potentially profitable customers and target those your are really aiming for.

  2. Revise and update your business plan regularly. Make sure everyone understands the plan and, in particular, their part in it.

  3. Conduct customer satisfaction surveys to make sure that key customers remain happy. Welcome ideas and even criticism.

  4. Introduce and update quality management systems to improve cost effectiveness and efficiency.

  5. Avoid discounts and chasing sales. Instead keep your prices up by adding value to what you sell.

  6. Regularly revise budgets and your financial provision. This will help identify shortfalls early.

  7. Implement credit controls systems. Avoid bad debts and chase overdue invoices immediately. Be polite but firm.

  8. Undertake credit checks on all new and existing customers and agree payment terms in advance.

  9. Examine ways to reduce overheads. But don’t cut back too far or you may not be able to respond quickly when orders pick up.

  10. Look at ways to retain good staff such as through training and personal development. This not only avoids time and expense recruiting but also means staff are more likely to be motivated and productive.