Your cashflow forecast is one of your most powerful management tools – it helps you prepare for the year ahead, make plans and monitor growth.

Most importantly, tracking your forecast against actual spend will help you understand where and why you’re overspending. Once you eliminate unnecessary costs, you’ll free up some cash to reinvest into your business.

As the adage goes, turnover is vanity, profit is sanity, but cash is king for your business.

cashflow

In Rachael’s experience of working with small businesses for over 20 years, here are some of the cost reduction tips she has learnt along the way:

  • Payments – Take deposits in advance and consider offering incentives for upfront payments.
  • Overheads – Be sure to shop around for deals – staying with the same provider doesn’t mean you’ll pay less. Make sure you have researched and found the best deals for you.
  • Equipment – If you use specialist equipment, instead of shelling out to purchase machinery, consider whether short-term leasing would be appropriate. Alternatively, if you already have specialist machinery, could you rent the equipment during any downtime?
  • Surplus Requirements – Sell your excess capacity/product to another firm. Selling excess capacity can benefit you and the buyer. There are companies that will broker the deals for you.
  • Energy Use – Investing into solar power does involve initial investment but could save you money in the long run. It’s worth pointing out that Green Grants are available and exist for this purpose.

Carry out this exercise annually and you’ll increase your profits – and have an accurate cashflow forecast to support your decision making.

About SWIG Finance

SWIG Finance is a non-profit company which supports viable Southwest businesses that can’t secure sufficient funding from their bank. By empowering underserved SMEs to overcome their financial barriers, we are working to create a more balanced financial eco-system.

We’re growing every year. In 2021/22, we lent £10.8m to 502 businesses, helping to create and secure over 1,000 jobs and generate £32.3m.

If you’d like an informal chat about your funding requirements, get in touch with our friendly and professional team to see how we can help: info@swigfinance.co.uk / 01872 227 930.