All businesses need money to invest and grow, but finding it can often be tricky.
The banks were unwilling to lend him more money.
Yet with a little bit of hard work he managed to come up with thousands of pounds – all of it interest-free.
How did he do it? Well, he realised a simple truth. The money he needed was sitting right under his nose, locked up in his own business.
Like all businesses, Brian’s company had a huge amount of money tied up in things such as property, equipment and slow moving stock. It was just about knowing where to look and how to free up the money.
Start by taking a look at your own business. Where might that hidden cash be hiding?
Do you have any property which is unused? Brian realised he had a lot of spare office space, so he started renting it out – giving himself a much needed source of additional income.
He also needed to upgrade to new, more sophisticated, IT systems. He paid for part of this by selling off his older equipment. This gave him a timely boost which meant he could afford the much-needed investment.
Do you have any old stock which has not been sold or is moving slowly? Why not sell this at cost? It will free up some much-needed funds.
Get in touch with any debtors who are slow to pay. Most companies have these – it’s one of the leading causes of small business failure. So chase late payments more effectively.
You might also encourage other customers to pay up more promptly by incentivising prompt payment plans. Give them a discount for fast settlement of a bill. From a cash flow point of view, you may well prefer to have a bit less money today than a bit more money in a month’s time.
Speak to your suppliers and try to negotiate more favourable payment terms. If you are a regular customer, they may well be willing to give you more time – allowing you to do more with the money.
As long as they trust the money is coming in at some point – and it doesn’t impact their own cash-flow too much – they will probably be willing to offer some flexibility.
Shopping around can also be surprisingly lucrative. Many businesses are paying well over the odds for basic bills such as energy and business insurance. Don’t accept the price your existing suppliers are offering – there’s almost certainly a better deal elsewhere.
Kill waste. Every business has it. Examine all your processes and make certain they are as efficient as possible. If you can make multiple small savings across the scope of your business they will add up in time to something quite significant.
A more effective pricing structure can also unlock more profits. Businesses in the UK miss out on millions of pounds’ worth of extra profits because their products and services are priced too low. Work out if there’s any wriggle room and if you could get away with charging a little more.
The point is this: Almost every business has money to be found somewhere, whether its unsold stock, unused property, equipment or infrastructure. Examining your business can not only unearth some of these hidden cash pockets, but they can also help you refine your business operations.
We can help you take a look at your business and unlock some of that hidden cash. To find out how, hit ‘reply’ and let’s chat.