With the start of a new year comes the opportunity to look at how we go forward into 2012 – and if you run a business, especially at the moment, you’re probably thinking about how you can succeed and develop. Last week saw the launch of the Business in You campaign, a major partnership between government and the private sector encouraging businesses to get off the ground and grow.
Finance is a key focus of the campaign. Though the environment might be difficult, the country has to make sure that businesses, and especially SMEs, can not only access the finance they need, but that they can get better information to enable them to make more of their finances. This is where Finance Fitness can help. Business and Enterprise Minister Mark Prisk wrote a blog on supporting the UK’s small businesses, and the insightful comments from readers demonstrates people are aware and ready to help.
A few years ago a bank did a survey on what caused its customers to fail. The main answer was ‘lack of sales’ which seems sensible to me, as that is what we are in business for – to sell things. So while cash flow management is critical, generating sales is in fact the key as without money coming in you will not be able to pay anything.
In the recent financial crisis it is clear that the majority of companies that have ‘survived’ the crisis best are those who focused on getting as wide a range of customers for their business, and across as many sectors as possible for their product.
This gave them safety – they made sure that ‘all their eggs were not in one basket’. Relying on key customers can be good but as one friend said to me they wished they had not become so comfortable with their big customer. When they experienced difficulties so did they. He mentioned that he wished he had widened his sales and customer base, but that it seemed like too much effort and trouble at the time.
Sell now as wide and as far as you can, as without sales there is no cash and that in the end is what brings businesses down.
And this is where Finance Fitness can help – over the next couple of months it will be highlighting exactly where you can find the guidance and support in accessing information, improve your financial planning and find the right kind of funding. February will focus on choosing and accessing finance, and tips and advice on getting paid on time by suppliers. There are lots of tools on the Business Link site: for example a whole section on diversifying and expanding your customer base as well as the new finance finder. I’ll be writing a regular blog for BIS over this time, and would love to hear your thoughts and suggestions.