Biggest cause of small business failure is lack of cash, warns financial trainer
Small businesses should watch their cash “like hawks” to keep their businesses afloat a West Yorkshire financial business trainer has warned.
Experienced commercial finance director Andi Lonnen from ALBA financial training says that whilst poor cashflow is the biggest single cause of business failure it can often be overlooked.
Andi said: “Setting up and running your own business is hugely exciting and there is so much to think about and do. Unfortunately, the one area often missed and which can mean the difference between business success or failure is a basic understanding of finance.
“Produce a simple cash forecast for a timeframe appropriate to your business, usually three months. A template is available here http://andilonnen.co.uk/free-resources/
Andi said whilst it is very easy to keep an eye on the larger expenses, it is very often the little expenses that start eating away at your profits and cash.
“Here, the cash forecast again will help you. Seeing all your costs written down in black and white can be disturbing enough to help improve your decision making and grow your business more successfully and quickly.“
Finally, Ms Lonnen warned that whilst increasing turnover is important, ultimately cash is king, so keep an eye on it. “Profit is sanity and cash is reality so ensure your sales are profitable and that your customers pay on time, “she said.
Andi, who runs finance training workshops for all businesses large and small, said: “My job is to make finance accessible and enjoyable to even those terrified of numbers, so if that is you, please get in touch!
Andi added: “The purpose of all our services is to improve the financial health and performance of your organisation. I challenge everyone to have courage in themselves and learn some basic business finance skills. Magic can happen when people know how to contribute to increased sales, improved costs and a healthier cash flow. It can turn around your business!