Available support for businesses during Covid19

Money

JobKeeper Payment Q&A

JobKeeper Payment Q&A

ATO has recently released the initial JobKeeper Payment guidance. We have prepared the following to help you understand and navigate the scheme.

Is the JobKeeper Payment Scheme compulsory?

No. Employers can choose to participate in the scheme and then nominate the employees they are entitled to claim for. An employer can choose not to participate the JobKeeper payment.

Who is eligible?

Employers will be eligible if all of the following apply:

  • On 1 March 2020, you carried on a business or were a non-for-profit organisation
  • Employed at least one eligible employee
  • Has faced at least 30% fall in turnover(turnover under $1billion)

What about Sole Traders?

Sole traders can be eligible for the JobKeeper payment if their business has experienced a downturn. ATO will provide more information soon.

What about other form of businesses, i.e trust or partnership?

Company, trust or partnership can also qualify for JobKeeper payments where a business owner, shareholder, beneficiary or partner is activity engaged in the business, and business has experienced a downturn.

It’s limited one entitlement for each entity even if there are multiple business owners or participants.  ATO will provide more information soon.

Do employers need to pay their staff before getting pay for JobKeeper payment?

Employers will need to pay eligible employees a minimum $1,500 (before tax) per fortnight.

JobKeeper payment will be paid to employer in arrears each month. The first payments will commence in first week of May 2020.

How to calculate a fall in turnover?

To work out your fall in turnover, you can compare either: 

  •  Turnover for March 2020 with March 2019
  • Projected turnover for April 2020 with April 2019
  •  Projected turnover for the quarter starting April 2020 with the quarter starting April 2019.

Who are eligible employees?

Your employee is eligible under the JobKeeper Payment scheme if they:

  •  Are employed by you (including those stood down or rehired)
  • Are permanent full time, part time or long term casual employee at 1 March 2020
  • Were Australian resident as at 1 March 2020
  • Agreed to be nominated by you

Do I need to inform my employees?

You must tell those employees that you have nominated them as an eligible employee to claim the JobKeeper payment. They must agree to be nominated by you by completing the JobKeeper employee nomination notice and returning it to you for your records.

Can I nominate my employees who were stood down or on long term leave?

Yes, employee who have been stood down from work without pay may still be eligible employees as they were in your employment on 1 March 2020. You will need to have paid them at least the minimum amount of $1500 for each fortnight you claim for, to receive the JobKeeper payment.

What about employees who have been terminated?

If you terminated an employee after 1 March 2020, you can re-engage them and they will be eligible if they met the eligibility criteria on 1 March 2020. You will need to have paid them at least the minimum amount of $1500 for each fortnight you claim for, to receive the JobKeeper payment.

What if employees normally earn less than $1,500 per fortnight?

If your eligible employees earn less than $1,500 per fortnight before tax, you must pay them at least $1,500 for each fortnight to claim the JobKeeper payment. This is a ‘top up’ of their wages and will ensure they remain eligible.

You CANNOT pay your employees less than $1,500 per fortnight and keep the difference.

What if employees normally earn more than $1,500 per fortnight?

If your eligible employees earn more than $1,500 per fortnight, you should continue to pay them their regular wages. However, you will only receive $1,500 for each eligible employee. Any amount you pay above $1,500 per fortnight is not subsidised by the JobKeeper Payment.

What actions do I need to take right now? 

  • Register your interest to JobKeeper Payment if you haven’t done so.
  • Check if you and your employee meet the eligibility requirements.
  • Continue to pay at least $1,500 per eligible employee per fortnight
  • Notify your eligible employee and ask them to fill out the JobKeeper nomination notice.
  • Most importantly, You or registered tax professional need to ENROL the JobKeeper Payment via business portal, by filling up online application form, with your bank details, estimated number of employees, and other details. The enrolment starts next Monday 20 April. You need to complete the enrolment by end of April.

We understand we are playing an important role in helping businesses affected by COVID-19. We want to help businesses to be able to access the JobKeeper payment to continue to pay their employees.

Here’s how we can assist you:

  • Workout if you are eligible
  • Identify your eligible employees
  • Ensure you correctly pay your eligible employees to remain eligible
  • Establish cashflow forecast for coming months
  • Enrol JobKeeper Payment on your behalf
  • Apply JobKeeper Payment on your behalf

Feel free to reach out if you need any assistance.

Reference:  https://www.ato.gov.au/General/JobKeeper-Payment/

Accurate Inventory Forecasting, No Crystal Ball Needed

Accurate Inventory Forecasting, No Crystal Ball Needed

Anticipating future demand is a tough job, wrought with ways you might go wrong. Proper demand forecasting and inventory control can save a company from buying too much or too little of something, which of course avoids expensive overstock scenarios or stockouts.

Anticipating future demand is a tough job, wrought with ways you might go wrong. Proper demand forecasting and inventory control can save a company from buying too much or too little of something, which of course avoids expensive overstock scenarios or stockouts.

What is demand forecasting?

Demand forecasting predicts what customers will buy, how much they will buy, and when they will buy it. There are different ways to come up with the demand forecast, and quantitative methods such as analysing past sales data usually have more accurate predictive results.

Having a strong sense of demand allows companies to make better strategic decisions about how to manage and grow their operations. Accuracy and the ability to capitalise on forecasts will depend on the success of a company’s inventory control practices and ability to understand itself and its market.

Forecasting for success

Correct demand forecasting and appropriate stock control can save time, prevent unneeded inventory costs mounting, and thereby increase profit margins. But there’s no crystal ball involved, only a set of best practices that can help your business make the most of its customer demand, present and future.

Adopt a repeatable monthly process

Increasing inventory demand forecasting accuracy requires a consistent process where your company comprehensively analyses previous forecasts and compares them to actual year-on-year sales results. Knowing where previous predictions have gone wrong or come true will help you define the parameters of your next forecast.

Work our what to measure, and measure it often

You might consider the range of information you can use to generate a forecast, for example, competitors’ sales data, point-of-sale data, amount of obsolete stock in stores, frequency of stockouts, shipment details, and order details.

Integrate sales channels’ data

If your company operates multiple sales channels, you should aggregate data from each channel to develop a full picture of demand for a particular product. This will help to identify which sales channels are providing the best return on investment, and which others are less efficient.

Ensure reliance on real-time, up-to-date, relevant data

The only way to accurately predict future inventory demand is to use accurate, timely data. Inventory control practices that ensure accurate record-keeping and easy stock management are essential tools for ensuring the right numbers are being crunched as part of your prediction of future demand.

Inventory forecasting best practice requires a company to look at itself and its market honestly and objectively, with a hint of hope for its future sales but tempered by a smattering of reality grounded in real numbers, facts and figures. With sound inventory control practices and accurate demand forecasts, your company will be set to tackle the market.

Related posts

Stock Control and Fixed Asset Management: What’s the Difference?

Aussie businesses get over $3.5m to launch their innovative idea into global markets

Aussie businesses get over $3.5m to launch their innovative idea into global markets

Offers for grants worth over $3.5 million will support 7 businesses to help launch their innovative products, processes and services into domestic and international markets.

The funding has been provided from the Accelerating Commercialisation element of the Entrepreneurs’ Programme.

Offers for grants worth over $3.5 million will support 7 businesses to help launch their innovative products, processes and services into domestic and international markets.

The funding has been provided from the Accelerating Commercialisation element of the Entrepreneurs’ Programme.

What projects are being funded?

The latest funding offers will assist:

  • Aldridge ITS in Sydney to finalise development and testing of its low-cost solar powered wireless level crossing system for the rail infrastructure market.
  • Checkedin Care in Sydney to conduct commercial trials of its product Care Cohort, an app developed to enable elderly and disabled Home Care clients to stay in their homes longer.
  • Concept Safety System in Logan City to integrate its Spatial Plan Service with state and regional emergency services agencies to help organisations prepare for and assist in emergencies.
  • Fivecast in Adelaide to develop and commercialise a new product, Fivecast AI to address a large, international market for very high-volume automated risk analysis.
  • Lucky Health in Sydney to conduct commercial trials to determine the effectiveness of its Perx medication adherence solution to address the problem of medication adherence for chronic disease patients.
  • Real Time Data in Tooperang to accelerate worldwide commercialisation of Deckhand, its world leading, commercial fishing e-reporting and analytics software.
  • Technobake in Moreton Bay to commercialise the DoughRunner, its commercial pocket-bread baking machine for the high-volume food retail sector.

What are the grants for?

The grants help businesses turn good ideas into marketable products through activities such as trials, upscaling and connecting with new markets.

Commercialisation Advisers from the Program work with the businesses through the different stages of their business building process to guide and provide advice.

So far 335 Australian businesses have benefitted from commercialisation funding through the Entrepreneurs’ Programme.

What to do:

Creating a business without debtors

Creating a business without debtors

There’s literally hundreds of blog posts giving you the 7-10 steps to reduce debtors and improve cashflow. Yet the debtors problem still exists to some extent in the majority of small and medium size enterprises (SMEs) globally.

Why receivables is so hard to solve

There’s literally hundreds of blog posts giving you the 7-10 steps to reduce debtors and improve cashflow. Yet the debtors problem still exists to some extent in the majority of small and medium size enterprises (SMEs) globally.

In New Zealand alone, SMEs are the biggest lenders and poorest at managing it, with over $1 billion owing their businesses collectively.

When it goes wrong:

  • You’re sending too many email reminders (causing needless friction)
  • You’re posting too many statements
  • You’re making too many phone calls
  • You’re lending too much cash to your customers
  • You’re writing off too much bad debt
  • You or your team is burning too much time chasing late payers
  • Your customers feel unloved, harassed or threatened

Good advice and support is hard to find.

  • The cashflow cycle is an integral part of business and impacts every part from sales through to delivery, account management and accounts/admin. Therefore the issues are hard to diagnose.
  • It’s too important to ignore – poor management of cashflow can cripple a business.
  • General advice does not suit all your customers.
  • Bookkeepers and accounts are not equipped to help.
  • Good, tailored tools are hard to find. What do you use – emails? spreadsheets?

Where to start?

The solution is not a ‘one size fits all’. Sending out loads of email reminders won’t work for everyone – and will be causing needless friction. However, when used with purpose and written in the right tone, asking the right questions, they are a good starting point to ‘open the can’.

Personalised, automated email reminders can:

  1. Gently remind those who ‘Oops I forgot’
  2. Reiterate your terms and consequences
  3. Give unhappy customers a chance to respond, which starts the conversation
  4. Save you money on manual follow up, calls and posted statements

Check out Debtor Daddy’s Remind web app – it offers automated reminders with a personal touch and proven template options ready to go.

The question is, based on your situation, how should email reminders be deployed to save you time, collect cash or surface questions and disputes.

Introducing divide and conquer – a strategy for eliminating debtors forever, long term

Your business is supported by a variety of different groups of customers, who are going to react differently to your followup approach for late payment.

By developing a well researched, proactive, segmented and proven strategy, it is possible to run a business with happy customers and without debtors or late payers. Ultimately, freeing your or your team’s time to get back to the doing the business you love.

By implementing a this proactive approach, it considers all your different customer groups and all aspects of business from quoting, payment terms, onboarding customers, work delivery, invoicing, followup and lastly, ease of payment.

Getting help

There are multiple, moving parts to receivables management. Credit control is not straightforward. There are experts out there who are able to help you start to get your process right, enabling continual monitoring and improvements as your business grows and changes.

Debtor Daddy are an outsourced receivables department.

Debt Collection: The Whys & When

Debt Collection: The Whys & When

Too often businesses leave collecting debts at the bottom of the pile. Why? Often there is anxiety and worry around the process, or lack of trust in collection agencies. Sometimes lack of time and understanding of the process.

Too often businesses leave collecting debts at the bottom of the pile. Why? Often there is anxiety and worry around the process, or lack of trust in collection agencies. Sometimes lack of time and understanding of the process.

But a business’ debt collection process should be an easy, no brainer business-as-usual process. Just like your other well established business practices.

At Debtor Daddy, we’re breaking down these barriers, so debt collection is efficient, unemotional and more likely to see results.

WHY: Let’s start with why you should collect your debts…

Number one: CASH FLOW. In business, we (should) all know how important cash flow is. Without it, we simply can’t sustain being in business. A good payment follow up and debt collection process will ensure you have the cash to be able run your business.

Be part of the answer: Odds are, if you’re having a hard time getting payment from a debtor, others are having (or will have) trouble too. It’s your responsibility to the business community to help rid bad payers.

WHEN: Don’t leave it too late

The sooner you follow up, the higher your success rate will be. Everyday that your debtor doesn’t pay an overdue invoice, the more unlikely you are to get paid at all. As time goes on, your debtor’s mindset changes around what they owe you, and if enough time passes, they’ll often eventually feel that they don’t owe you anything at all.

And keep in mind – if you are giving your customers 30 day terms to pay, then by the time you reach the 90 day mark, you’ve been out of pocket for FOUR MONTHS! And even more shockingly, most businesses are leaving kicking in the debt collection process until 180 day.

Remember to follow up with overdue invoice reminders and phone calls regularly. And set yourself a rule in your business that a debt collection process kicks in at between 60 to 90 days overdue.

Interested in how Debtor Daddy can help with your business with debt collection? Chat to one of our Receivables Specialists about our Collect service today.

If You Don’t Got the Time, You Don’t Got the Money

If You Don’t Got the Time, You Don’t Got the Money

Clichés. Can’t live with them, can’t live without them. (See what just happened there—it’s that bad).

The most widespread, just-waiting-to-pop-out-at-you, cliché is a very short one, measuring just three words—time is money.

What is time?

Clichés. Can’t live with them, can’t live without them. (See what just happened there—it’s that bad).

The most widespread, just-waiting-to-pop-out-at-you, cliché is a very short one, measuring just three words—time is money.

Usually, you hear this quoted by someone who is still waiting for the moving company to arrive. Or if someone has forgotten their work laptop at home, and has to turn the car around to retrieve it.

Parents are also very good at muttering this with disapproval if they see you playing video games on a weekend when you should… well, exactly what else should you be doing?
Time is money

The big lesson is that time is actually worth something. Companies pay employees based on time worked, which means that there is a dollar amount attached to every second of our every day.

But the relationship between time and money goes deeper than that.

Here are three connections between time and money that you need to know about:

  1. Time-value of money: Time actually affects the value of money. A dollar earned today is worth more than a dollar earned next year, because of its ability to accrue interest—something of particular interest (long live the pun) to retirement planners and lottery winnersalike.
  2. Cash-flow forecasting: For small businesses, another way that time interacts with money is in forecasting your cash flow, a necessary practice for any business, but particularly if you experience seasonal variability in cash streams. Looking into the future allows you to make wise financial decisions in the present—it’s time and money working side-by-side.
  3. Music connection: (just for fun and since it’s almost the title) My dad taught me this one—he is fond of crooning show tunes from the mid-1900’s while working in the kitchen on Saturdays—Lefty Frizzell’s “If You’ve Got the Money, I’ve Got the Time” was a particular favourite of his. It’s this country song’s title lyric that leads us to…

The country contrapositive (also the title)

A contrapositive is just an “If-then” statement, reworded to be negative.

For example, someone could say “If I am Shrek, then I am green.” The contrapositive would be “If I am not green, I am not Shrek.” That’s easy to remember, right?

Then the contrapositive to “If you’ve got the money, I’ve got the time” is…

That’s right – “If I don’t got the time, you don’t got the money.”

Time is money, so how does your company track it?

At your small business, one often overlooked aspect of cash flow is employee time tracking.

It’s so important to track time correctly.

If a company relies on paper timesheets or the honor system, this exposes the company to unforeseen liability. Inaccurate time tracking leads to inflated payroll, inaccurate job costing, and miskept books.

Time is money. Every second counts, and every second is counted. That’s why it’s crucial to accurately record time so that it doesn’t lead to problems with cash flow.

Finding a time tracking software that replaces inaccurate paper timesheets, and has bonus features like scheduling and reporting tools, not only alleviates concern about cash flow, but it simplifies many of the workflows you already have in place in your business.

After all, as the small business owner, your time is money too.

Conclusion

Country songs, contrapositives, and my dad’s domestic broadway audition—what is the big takeaway here?

You should know now some of the many relationships between time and money.

Most importantly, it should be clear that since time is money, time tracking impacts every area of your business, not just payroll – but your cash flow too.

Finding the appropriate time tracking software is a great first step to making sure that you’ve got the money, honey—and the time.

Tax deductions for small business owners

Tax deductions for small business owners

Tax time is fast approaching—it’s important to do your homework and know exactly what tax deductions you can claim.

Tax time is fast approaching—it’s important to do your homework and know exactly what tax deductions you can claim.

What can a business claim as a deduction on your tax return?

You can claim a deduction for most expenses you incur to run your business, as long as they directly relate to how you earn assessable income.

Travel

If you or your employees travel for work, you can claim deductions on transport such as airfares, train, bus or taxi fares.

For overnight travel, the rule for claiming expenses is:

  • one night or more – keep written evidence of all expenses
  • six or more consecutive nights – keep a travel diary recording all the particulars of the business activities you undertake.

Check out the Australian Taxation Office (ATO) Business travel expenses information.

Motor vehicle expenses

Do you have a car you only use for business?

Claiming expenses and how you calculate them will depend on:

  • your business structure (i.e. sole trader, company, partnership or trust)
  • the type of vehicle
  • how the vehicle is used.

Go to the ATO’s Motor vehicle expenses page to learn more.

Repairs and maintenance

You can claim a deduction for repairs and maintenance on your business assets, including:

  • painting
  • conditioning gutters
  • plumbing maintenance
  • repairing electrical appliances
  • repairing machinery.

For more information visit the ATO’s Repairs, maintenance and replacement expenses page.

Running your business from home

If you run a home-based business, or have a home office where you work from home, you may be able to claim:

  • occupancy expenses – such as mortgage interest or rent, council rates, land taxes, house insurance premiums
  • running expenses – such as gas and electricity, phone, decline in value of plant and equipment, decline in value and cost of repairs to furniture and furnishings, cleaning.

Use the ATO’s Home office expenses calculator page to help you work out the amount you can claim as a tax deduction for home office expenses.

General operating expenses

Operating expenses are the costs you incur in the everyday running of your business, such as:

  • stationery
  • salaries
  • internet
  • insurance.

You can generally claim a deduction for most operating expenses.

Check out the ATO’s Other operating expenses page for a full list you can claim information.

More information

Is Revenue A True Predictor Of Success?

Is Revenue A True Predictor Of Success?

It may mean fame, and for others it may mean power. But can revenue be a true predictor of success?

In the business world there is not right or wrong way to define success. It’s merely subjective. It is based on both the personal and the business goals that you have in place for yourself. These can vary tremendously from one person to the next. Many believe that there is in fact only one path to success, and they simply choose not to consider other patterns of thinking. In their mind, this way of thinking is what will help them to reach their end goal.

It’s all in your ability to adopt change when it comes to your current systems and process, that will help you as you carve out your route to business success. If you begin to place too much confidence in your ability to make good judgements and decisions and solely rely on old patterns of thinking, you’re giving no weight to the environmental factors surrounding you that are constantly changing.

As we all know, the costs that typically make up a business are:

  • Your fixed Costs
  • Your variable Costs
  • Your employee Costs

And then you have your little shining beacon. Your profit.

Ask yourself. Are you measuring the right things? Many have the perception that they know what makes up the correct monetary equation to predict their profit. We believe this is a naive way of thinking unless you’re consistently taking into account the effects of both your controllable and uncontrollable costs. Unless you are 150% sure your decisions are supporting your overall goal for profitability – there will never be complete accuracy in your figures. What you are measuring needs to show:

  • Continuity in accuracy
  • And, the numbers need to hold the correct weight.

It’s like being the coach of a sports team. You’re employed to pick players based on their skills and their ability to play within the team. There needs to be continuity in accuracy and you must weigh up the importance of the correct statistics. What abilities are most relevant based on the current game and competition. The environmental factors.

So there you have it. Revenue can be a predictor of your success. If you choose to measure it correctly. 

(1) www.oxforddictionairies.com /definition/english/success
How to Double Your Retail Sales: Lessons from the Gift Shop Poopsie’s

How to Double Your Retail Sales: Lessons from the Gift Shop Poopsie’s

Meet Alana Turner, the co-owner of Poopsie’s, a quirky gift shop in Galena, IL. When Alana and her co-owner took over the business in 2010, they had about 5 employees.

But Poopsie’s has grown tremendously since then. Not only have they more than doubled their annual sales, but they also have an average of 15-20 employees.

In this article, we explore how Alana and her team achieved their impressive results. Specifically, you’ll learn:

  • How investing in staff training helps their store be more successful
  • The task delegation technique they use to improve staff productivity
  • Alana’s top tips for creating shoppable displays that drive sales

Let’s get started!

Investing in additional — and better-trained — employees

We’ve said it before, and we’ll say it again: Any retailer that wants to stay competitive needs to invest in their staff. Remember, your employees are the people who are doing the selling, so if you’re looking to increase sales, start by investing in them.

Alana and the Poopsie’s team understand this, and according to her, the investments they’ve made in their workforce have significantly contributed to their success.

“Our success is for sure partly because of our well-trained staff,” she shares. “We invest a great amount of time in training our staff to be the best personal shoppers (known as ‘Poopettes’) they can be. They are one of the main reasons customers travel hours to revisit us time and time again.”

Alana says that they use “multiple layers of training” for their staff, even before their first official day. The training is also continuous, so employees are always going through some form of coaching, no matter how long they’ve been part of the company.

As for how the training is implemented, Alana tells us that each Poopette is trained by management or a subject matter expert. Their education begins with written information on Poopsie’s policies and procedures, then they move on to educational videos on selling. From there, Poopettes go through hands-on training on the sales floor, where they shadow a manager or a top-selling Poopette for a day or two.

According to Alana, they also layer on new videos and additional written information about their products and services. Managers are trained on new and hot products every day and all year round.

The task-delegation technique that improved employee efficiency

Continuing on the topic of staffing, Alana says they were able to boost the productivity of their staff by having them specialize in particular tasks.

We “decided to move away from everyone being trained to do all tasks and move towards having certain staff trained to specialize in areas,” says Alana. “For example, instead of all staff helping with receiving every day in between customers, we now have one person that does 80% of our receiving for us.”

She continues, “This has helped cut down on errors and inefficiencies in receiving, which as we all know equals lost profits, and it has allowed the sales staff to focus more on selling to customers.”

“Some other areas we have hired specifically for are: cleaning, restocking, and displays, as they were all areas consuming a lot of our sales staff’s time. We still have these Poopettes trained to sell so they can service customers if needed, but when they are in the building their main focus is their task and the sales staff covers 90% of the customers.”

Why did they decide to do it? According to Alana, they started to catch employees doing other tasks when they should have been serving the customers near them.

“It’s not that they weren’t working hard; they just weren’t focused on the customer enough for us. So we started delegating certain tasks specifically to staff to tackle and it just took off from there,” she shares.

“We still, of course, keep all staff busy between times of customers, but we are more mindful about how involved the tasks we give out are. And all the big ones are assigned to staff who are not in charge of selling that day.”

How to buy and showcase merchandise

Alana also attributed their growth to the way that they’re using their space.“Our constant focus is on how we can utilize every usable square foot of our space to best fit the needs of our customers,” she says.

Doing that involves:

Buying products their customers can fall in love with

“We put a lot of energy and effort into providing above and beyond customer service to our customers, providing unique products and services that they won’t find at Target and other familiar stores, and also in presenting our products in ways that make customers think about the items differently. 

She continues, “a lot of the buying really does just come from within or the gut as they say. I’m just blessed that I’m fairly good at it. Though I do have to spend a lot of time looking through catalogs, emails, buying shows and etc to continue to find new, trendy and exciting products for our customers.”

Presenting those products in clean and shoppable displays

According to Alana, having “fresh, new, and clean” displays are critical. “Another important tip with displays is that the best selling zone is from the waist to the forehead, so you always want to be thinking through how you are utilizing that space in each and every display. Otherwise, you are letting dollars walk out the door!”

Alana says that displays that “are more boutique in style” work best for Poopsies. She says that in most cases, their sales tend to slow when they starting “massing out” their merchandise or packing items into tight displays.

The Poopsie’s team also knows which areas turn dollars the quickest, and they see to it that those displays are always in top condition.

The final piece of advice

When asked about any words of wisdom she’d like to impart, Alana focused on having the courage to try new things and take a little risk. “With all of the technology and instant communication surrounding us today, things change faster than they ever did before. So if you can’t try new things and be willing to change and change often, you will have a hard time thriving in the current retail landscape. You can probably survive but you won’t thrive.”

Ready, Set, Grow: A Guide to Funding Business Growth

Ready, Set, Grow: A Guide to Funding Business Growth

Almost every small business struggles through ups and downs on their journey to funding business growth.

When you’re battling the day-to-day, it can be easier said than done to identify and embrace opportunities for growth, but there are a few different areas where the right finance could help.

Take on new projects

If you have the opportunity to take on a new contract, it’s exciting news for your business, because new work means more customers, and eventually, increased revenue. Some new projects are a stepping stone for growth, whereas others will be make-or-break for your company. Either way, you might want to use finance to make things a bit more manageable.

Winning new contracts is a good sign for the quality of your service but may seem like a big challenge. Many firms choose to use finance to boost their working capital, and going down this route means you’ll be able to buy new materials or equipment, or even hire more employees.

With many alternative lenders, you’ll get the funds very quickly — in days, if not hours — so you can take advantage of new opportunities safe in the knowledge you’ve got the cash you need to see it through.

New equipment or machinery to boost growth

Updated equipment or machinery can help you work (or produce) more efficiently. There are many types of asset finance that can help you acquire new machinery or equipment — whether you need a new van, a more efficient excavator, or updated computer systems.

Whatever equipment you need, using asset finance is a simple way to kick off growth. Simply put, you can get new assets but still maintain a healthy cash flow, because you can use the assets without having to pay a huge amount of money upfront.

Pursue new markets or expand into new offices

New markets mean new customers and potentially greater traction for your product or service. However, every small business has limited resources, and additional funds may be a useful or even necessary option to realise your international plans.

Many firms use trade finance in this situation, which is designed for paying suppliers. It’s based on purchase orders, so if you’ve taken on a big new customer you may be able to raise finance even if you haven’t been trading long. In fact, one of our recent customers MyGatorWatch did exactly that, with only 6 months of trading history.

The same applies to domestic expansion. If you’re getting lots of new contracts, ordering more stock, and hiring more staff, you’ll naturally think about expanding to another location — but it’s difficult to do so if your working capital isn’t keeping up. An all-purpose business loan could be helpful here, so you know you’ve got some extra cash to cover the short-term costs while your revenues catch up.

Embrace new types of growth funding

When you’re looking at using finance to grow your business, it’s important to keep an open mind. The business finance market has changed drastically in the last decade, and innovative business finance options like crowdfunding and peer-to-peer lending can be a smart way to give yourself some financial tailwind.

There are lots of platforms that allow businesses to get equity investment or a business loan from ‘the crowd’, but it’s important to bear in mind that if you choose to go down this route, your business needs be attractive to potential investors or lenders. For this reason, it’s not suitable for every growing business, but it can be a worthwhile option to explore.

Equally, there are lots of new options for ambitious business owners looking to take over existing firms. Raising finance for mergers, acquisitions, and management buy-ins and buyouts is complex, and can be structured in many ways, but there are lots of lenders in the market who could help. If you’re planning your next move for business growth, it’s a good idea to start thinking about your funding options early.

Conclusion

Running a business is tough work, and there are many challenges you have to get through — from setup to survival, to growth. But, if you prepare your strategy early on, alternative finance can help you approach the next step and move your business forward whether you’re expanding internationally, or getting a second van.

Float allows you to see the reality of the cash flow in and out of your business. By monitoring your cash flow through Float you can be one step ahead when applying for funding – you’ll know if, and when, you’ll need to.

About the Author
Conrad Ford is Chief Executive of Funding Options, recently described by the Telegraph as “the matchmaking website for small businesses and lenders”. Funding Options has been selected by HM Treasury to help businesses find finance when they’re unsuccessful with the major banks, as part of the Bank Referral Scheme that launched in November 2016. @FundingOptions