Aug 16, 2023
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2
3 min read
A lot of industries are finding it increasingly tough right now due to big cost increases, ongoing supply chain disruptions, shortages of skilled staff, rising interest rates & rent increases, ongoing world threats, a possible looming recession, and to top it off banks are playing hard ball and have stopped lending to many SME’s. I could keep going but I'd rather give you something more positive to focus on and prepare you for what may come.
It's time to batten down the hatches!
Here's what you'll need to succeed:
- A change in thinking
- A solid business strategy
- A good finance plan
- Adequate working capital
- Discipline
- Flexibility
Two key finance tools that come to mind in this kind of environment are Trade and Debtor finance. These tools can help free up cashflow for your business that you may not have thought of before.
- Trade finance frees up cash you pay to your vendors.
- Debtor finance gives you access to money that your customers owe you - not when the invoices are due to be paid, but NOW.
These products are particularly attractive in today’s market because while interest rates are no longer zero, they’re still relatively low and way better than credit card rates or the possibility of closing your doors altogether.
These products give you working capital, choice and opportunity that may not have been there before.
With one recent client, the extra working capital they received gave them access to a lump sum of $300,000 - available immediately, and without having to sell other assets or mortgaging the family home.
That sort of money not only solved their short-term cash flow problems - it also gave them running money and more opportunity to actively build for the future. Instead of “waiting and hoping for things to change” they took charge and made use of what was available to them. Smart!
In today’s world and business environment thinking differently about the way you do business can make a huge difference.
Choice Creates Advantage.
This is an opportunity to do things smarter, not harder. If you have the foresight, tenacity and the courage to weather tough times, you have the advantage to out-perform your competitors, putting you in the box seat.
While everybody else is tightening their belts and getting conservative, you will be able to service your customers with ease and use your working capital to your advantage.
For example:
- Buy in larger quantities or pay early to get cost discounts from suppliers.
- Pay your subcontractors quicker than the rest of the market.
- Put money aside for staff wages.
- Invest in systems, tools or training that will free your business up more to grow.
All the greatest fortunes are made in tough times. So, if you've got the courage, the tenacity, the conviction and the vision to have a go, having the extra working capital means that you'll be able to back yourself.
With the right funding, you can look much further ahead than next week or next month. Instead of one step forward one step back, you can get ahead in leaps and bounds.
Ask yourself; where do I want to be in 3-5 years? And how can I set the foundations for that today?
Three years from now you’ll be in an even better position. While your competitors have folded and the market has flushed out the cowboys, you’ll be thriving, becoming a trusted business in your industry and known by your network as someone who can pay on time. You will have good systems in place and be respected by people in your team. You will feel like a winner and be an example for what’s possible for generations to come – all because you thought ahead and acted before it was too late.
You have options, staying vulnerable and on a collision course to financial ruin should not be one of them. While cashflow shortages will keep you stuck in the storm and limited in thinking, an injection of working capital will allow you to see beyond the storm toward the sun onto new horizons.
Are you ready for change?
Here’s a test that you can do:
- Add up all your payments to suppliers over the last 60 days.
- Add up all your outstanding customer invoices issued in the last 60 days
- Add those two numbers together.
- Calculate 80% of that number - which is your potential working capital boost.
If having immediate access to that amount of capital would transform your business (or even just ease your stress levels considerably) then get in touch with us today.
With the right working capital strategy you could lead your business into a more certain future and onto greater opportunities.
Book a free consultation with one of our finance experts today to discuss your working capital strategy, and set yourself up for success.
Paul Boyd-Skinner
