"Slow payments cause worry for businesses" Article by Steve Marsten

I recently read that businesses are taking longer to pay each other. It’s nearing two months according to Dun & Bradstreet. We have seen plenty of examples of this in Gladstone. As a small business owner, how do you juggle your personal debts when it takes nearly two months before you can pay yourself? How do you kick the debt football out of the park?

It’s all about planning. I know we bang on about “cashflow is king” here but it’s not always possible from day one. As everyone knows here in Gladstone, it’s not a smooth run in business. There are some quiet months.

Our experience is that small business owners have a home loan and credit cards that they use to juggle their personal finances. Managing these situations comes down to improving business cashflow and making sure you have the best possible finance deals available. There are plenty of strategies that can help improve your situation.

1. Be prepared to face the fact that your personal finances are in trouble! Too many business owners stick their heads in the sand and hope things will magically sort themselves out.
2. Consolidate loans when the opportunities arise.  Look at what finance options are better value.  Talk to your business adviser – even if you may not think you can afford them.  You need them in these situations more than ever. Talk to your bank managers - keep them in the loop. Talk to your key suppliers and creditors - ring them before they ring you!
3. Prioritise your debt payments. Tackle the debts with the highest interest rates or similar strategies.
4. Ask your banker if you are getting the best rates on your loans. Ask for a debt review.
5. And finally – know your numbers. Use a software program that is not a burden to you but instead is a vital tool to keep you up to date.

At Sothertons we are about helping small business owners and Mums and Dads become financially well organised and ready to overcome the immediate challenges. It’s times like these you do count the cents and remember why you originally went into business. Take stock and strategically look ahead and prepare for the next economic phase.