As part of a continuation of our How to Build a Better Business blog series, we’re covering the questions to ask when taking the third step in analyzing performance: reviewing your financial position.
Systems integration firms often fail because of poor financial management or a lack of planning. When it comes to your business’ success, developing and implementing sound financial and management systems (or paying someone to do it for you) is vital. When reviewing your finances, consider the following:
- Cash flow: Make sure that your forecast is regularly reviewed and updated.
- Working capital: Have your requirements changed? If so, explain the reasons for any movement. Compare this to the industry norm. If necessary, take steps to source additional capital.
- Cost base: Keep costs under constant review. Make sure your costs are covered in your sale price, but don’t expect your customers to pay for any business inefficiencies.
- Borrowing: What is the position of any lines of credit or loans? Are there more appropriate or cheaper forms of finance you could use?
- Growth: Do you have plans to adapt your financing to accommodate your business’ changing needs and growth?
This information was gathered from Info Entrepreneurs, a team of business information experts from the Board of Trade of Metropolitan Montreal, part of the Canada Business Network.