Through experience, business owners and operators become naturally attuned to the peaks and flows of the economy. However, when the livelihood of your workers and your family are at stake, it is too great a risk to place complete trust in gut instinct.
So how do business owners and operators plan for and recognise times of growth and recession?
Despite its dense and often complex background, successful businesses will follow the macro “financial cycle” of their environment to inform business decisions and avoid glaring pitfalls.
What is a financial cycle?
Also referred to as business cycles, financial cycles map out the rises and falls in economic activity. Through mapping and analysis, businesses can better recognise symptoms of growth and recession, as well as determine the likelihood of economic shifts.
How are these changes mapped?
During economic expansions, elements such as jobs, production and sales will show keen signs of growth.
Conversely, economic recessions are indicated through rising unemployment, slow growth and stagnating prices.
What does this mean for my business?
While your business might not feed directly into the major players in the economy – such as mining resources – a shaky economic prediction or a rumour on the grape vine can quickly and inexplicably gouge sales from your business.
This is why businesses need contingency plans in place to insulate against economic issues and ensure debts are being paid regularly during times of plenty.
As a business owner, what can I do for my business?
There are a number of options business owners explore and add to their tool-kit to build a stronger foundation:
To start with, you need to make sure your business only takes on manageable risks.
Qualifying customers can help you avoid serial pests and costly mistakes.
You can make sure your customers are above board by completing a thorough credit check. Specialists like us are able to review a host of important information to give our clients a better picture of their customers:
- Correct legal identity
- ASIC reports
- International reports
- Litigation investigation
- Bankruptcy searches, and more
Next, businesses need to understand the nature of their cash flow to better determine how much they can personally invest in growth measures and expansion without overextending.
While it isn’t always possible to self-fund new projects – such as plant equipment for a new contract – there are affordable and manageable options available. Some of the areas we can help with include:
- Commercial mortgages
- Equipment leasing (manufacturing machines through to office fit-outs)
- Cash flow plans
- Corporate finance
Unpaid debts can crush even the most conscientious business, so to prevent debts from strangling your business plans and finances, enlisting a debt collection agency can help you recover the money you are owed.
Covering the whole spectrum of debt collection, our team approaches each challenge on a case-by-case basis. This means that we can scale the management of your debtors accordingly to promote swift debt repayment.
To ensure the longevity of your livelihood, start planning and managing your business finances before it’s too late. For more information on any of the products and services listed above, talk to the experts and call us today.