Running a successful and profitable company is never a walk in the park, but there are a few tricks executives have developed to make it easier, and the Financial Doctor sees no reason you can’t know and use them too. If you own an organization of any kind, whether a small business, non-profit, or franchise in need of better finances, consider these three tips for your financial strategy.
Employee Benefits Trickle Up
Many companies no longer offer pensions, but most large companies still have 401(k) plans that may or may not be employer matched. If you want to keep your employees dedicated to their jobs, then offer incentives that will keep them there. Hard working employees that are earning retirement supplemented by their employer will be more reluctant to leave. Also offering employee benefits like paid time off is a smart move as well. If you don’t already offer these or if you would like to make changes to your employee benefits, talk to your financial advisor and see what your company is able to handle.
Focus on Cash Flow, Not Profit
If your company is doing well and you see a healthy profit on your quarterly profit and loss statements, then why are you having so much trouble paying your bills? If the money is obviously there, where is going? The problem may be that you’re failing to collect your company’s receivables on time. If your customers are taking too long to get their payments in then your company’s finances may be compromised. The best was to solve this is to get on top of your accounts payable management or ask your financial advisor if there are any policies you can put into place that would help solve the problem in the future.
Consider Vendor ROI Rather than Loyalty
Running a business can turn into more than just a fulltime job, and some tasks can become easily overlooked. You may choose to use the same vendors year after year because you’re comfortable with them or because you get along well with them. However, using the same vendor for a longer period of time may not be in your company’s best interest. Check with your financial advisor to see if you’re actually losing money in the long run by using vendors that no longer provide the materials you need at a cost effective price. Review your vendors annually and check to see if their prices are still the best deal for you. If they’re not, you might have to do the hard thing and switch to another vendor that will save your company money.
If you have more financial advice for business owners, please add your input below. If you have more questions on the other hand, please feel free to ask the Financial Doctor by commenting as well.