If you’re managing your business’s financial situation by keeping one eye on your bank balance and the other on your outstanding bills, you’re missing out on a huge number of insights into the liquidity of your venture.
You may be reporting year-end profits, but when your everyday cash situation is looking worrying – due to running costs, overheads and tax liabilities – it’s time to delve into the numbers and get a better handle on your cash flow.
At Tyrrell and Company, we’ve worked on valuations for many of our clients. It’s an important part of planning a growth strategy or the end sale of the business, so getting as accurate a valuation as possible is always the end aim.
And, in our experience, there are four basic criteria that have an impact on the end value of a business
If you see your advisers once a quarter – or worse still, once a year – then you don’t have the right kind of depth to your advisory relationship.
You need more frequent contact and a more productive working relationship with your accountant. By meeting and talking regularly makes a big difference between a ‘traditional accountant’ and a ‘modern cloud-based accountant’ – a good, 21st-century accountant is a trusted business adviser, not a dull bookkeeper.
Too many businesses survive with one eye on their bank balance and another on an ever-growing pile of bills to pay. They survive, day to day, but there’s no stability, no profit and definitely no foundation for growth. And this kind of short-termism can be fatal for a number of reasons:
We live in a digital world now. And that has created a whole host of new ways for you to interact with your customers and targets.
The effectiveness of your website can make or break your profitability. And social media, mobile advertising and email marketing all give you new channels to explore within your marketing strategy.
But technology is just the catalyst. What you REALLY need is a very clear view of your audience. And that means asking some important questions.
Making money. It’s at the route of what your business does.
Whether pure profit is your end goal, or whether you need to release more cash to speed up the overall growth of the company, having a focus on improving your profitability is a vital part of good business management.