It’s the spookiest time of the year, but the Halloween frights aren’t just reserved for trick or treaters.
Want to make sure your business doesn’t turn into a horror story? We’ve put together some of the most common business nightmares, and how to avoid them.
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1. Cashflow catastrophes
Even with the best will in the world, unexpected cashflow issues can arise. You might well be doing all the right things – setting budgets, benchmarking your progress, and tracking and predicting cashflow in an app. But even then, the worst can sometimes happen. In fact, according to Solution Loans, 60 per cent of small business owners say cashflow is a major concern.
What’s your cashflow situation looking like as we head into the holiday season? If your business is seasonal, how will the break affect you? Looking ahead, do you have enough of a slush fund to keep you going through barren times?
Make sure that you have as tight a grip on your cashflow as you possibly can. There’s a range of new tools available to help you manage different cashflow scenarios – try Float, one of our favourites.
2. Credit panic
Borrowing isn’t always bad – in fact, many businesses rely on credit of some sort to grow and succeed.
But what happens when you can’t access the funds that you need? This has become a more pressing problem since the economic downturn, and many conventional lenders remain reticent to extend credit lines, especially to newer or unproved businesses.
If you’re struggling to find the funding you need, there’s a number of new avenues you might want to explore. Peer-to-peer lending, for example, can be a cost-effective way of borrowing when you might otherwise not be able to, or if you’re looking for a medium-term solution you might consider running a crowdfunding campaign.
Find more details on how to raise money in our finance guide for small businesses.
3. Economic horror
The world might seem like a terrifying place this Halloween, and if you believe some commentators, we’re in for an economic shock. There’s still no consensus on the impact of Brexit, and beyond that there’s a sense of broader economic instability around the world. Small businesses need to be prepared.
Don’t want to be kept up at night reading the business press? Then you need to take some steps to mitigate the impact of economic changes.
If you’re a consumer-facing business, you should be trying to position your business such that it is less at risk from reduced consumer spending. If you trade internationally, make sure you’re taking hedging positions in order to protect yourself against global currency fluctuations.
4. Frightfully late payment
Late payment is a recurring nightmare for small businesses, with billions reportedly owed every year. If you’ve been in business for even a short period, it’s likely that you’ve come up against the problem of tardy clients – and the impact on cashflow and growth can be the stuff of horror films.
Thankfully, there’s a few things you can do to help. First, make sure that you’re completely clear about your payment terms up front, and that these are included on all your invoices.
Set up systems to track invoice ageing, and where possible automate reminders when payment is due – there’s lots of bookkeeping software and apps that allow you to do this with a few clicks - here’s a list of some of the best accounting software for UK small businesses.
If the worst comes to the worst and your clients still aren’t coughing up, remember that the law is on your side. Read about the Late Payment of Commercial Debts Act to see how you could use a simple legal tool to help you get paid.
5. Insurance nightmares
Nobody likes to think about insurance, but in the event that the worst happens it can help to protect your business against potential disaster. Are you properly covered?
A good business insurance policy can help to guarantee your business’s future in case of an accident or mistake. Whether you need public liability, employers’ liability, or professional indemnity, a tailored policy can help you avoid a real scare.
6. Stock shocks
Finally, if your business trades in goods, the last thing you want is a last-minute stock disaster. Whether you’re overstocked or understocked, a shock to your inventory can be devastating.
Inventory management is a cornerstone of any retail or wholesale business, and by making that process as efficient as possible you can help to minimise the risk of stock problems. Want to know some top tips and tricks for effective inventory management? Read our guide on how to do the perfect stock take.