The Benefits of a Financial Detox for Your Business
Even if you’re on top of things when it comes to your company’s financials, there are always other things that you can do to run a more efficient and productive business.
Yes, branding and marketing will take up quite a bit of your time as you seek to reach a critical mass of your targeted demographic and to set yourself apart from rivals. But sound financial management, where you look at money that comes in and money that goes out, means you need to step back and focus on your corporate financial health via the occasional financial detox for your business. With the right plan, you’ll find out exactly what your company makes, spends, and saves so that you can intelligently plan for and achieve near-term and long-term goals.
Read on for a look at the sorts of benefits you can obtain by pursuing a financial detox — benefits that will free up money to pour into marketing, branding, and more.
- Understand Financials: Before you do anything else, you absolutely have to audit your budget. Over time, certain financial problems can arise that may not be obvious unless a proper budget audit is conducted. As you look at how much you’re spending, what you’re spending your money on, and how much your bringing in, you’ll get a better picture of how well your business is really performing. Over the course of your budget audit, be on the lookout for payables that don’t fit neatly into any category that would be considered core operating expenses. You can then determine whether or not these payables can potentially be eliminated.
- Identify Late Payers: When you comb over your books, make note of customers whose accounts are not not up to date in terms of payment. This group of clientele can be a major financial drain on your bottom line depending on how many such clients you have. So, figure out how you can properly resolve this problem. This may involve dropping these debtors, establishing and enforcing tougher terms, or doing more to get customers to pay. In the end, you might implement new policies such as requiring deposits, pre-payments, or cash on delivery.
- Streamline Funding: If you have a number of loans, you might want to, among other things, look at the interest rates attached to these loans and consider perhaps reducing the number of loans you have as part of a streamlining effort. While it’s never a good idea to tap into your personal bank account to help supplement your company’s budget, the right business loan can provide you with more financial flexibility and working capital to address your business needs.
- Set Goals: It’s been said that those who fail to plan, plan to fail, and that’s definitely true when it comes to business. You need to sit down and figure out your business objectives for the year. Whether you plan to ramp up your marketing and branding efforts, open up a new branch office, go on a hiring spree, or expand into new product categories, you must factor these things into the equation as you work on your annual budget. Be sure to leave some extra wiggle room as far as budget cap to allow for any curve balls that might come your way.