Authorised Financial Services Provider No. 14000

Authorised FSP No. 14000

ZULULAND INSURANCE BROKERS (PTY) LTD

Business Finance Tips for Small Business

Brought to you by Santam


As a small business owner, it is no brainer that financial planning is critical for survival. This month, we encourage you to get your financial house in order by preparing a financial road map for the year ahead. COVID-19, lootings and unrest, and a sluggish economy have had a devastating impact on many SMEs.


Now’s the time to take the reins and relook your financial priorities, possibly in partnership with a trusted financial adviser or intermediary.


Here are five tips to tighten up your business’ finances:


It all starts with a plan:

A holistic financial plan should include a budget, accounting, tax planning, risk management (including insurance and an emergency fund), and some forecasting for the future. Analyse your accounts for insights into performance and keep abreast with your bookkeeping so you can track progress to reaching your goals. Consult your intermediary if you feel like you need help coming up with a practical, step-by-step plan for the next 6-12 months. The last 12 months have shown that circumstances can change fast. Insurance should be a pivotal part of a financial plan as proactive risk management is essential.


Wax your tax:

Tax season is usually stressful. But it doesn’t have to be! Keep your records and bookkeeping tight to avoid unnecessary hassle later. Consider ways to maximise your tax deductions to lower your tax burden. Again, consult your intermediary for the best ways to do this.


Win with cash flow:

Cash flow is an ongoing issue for most small business owners. Keeping it tight takes time to get right. It’s an ongoing exercise of getting a handle on business direct and indirect expenses and overhead costs. Chart your cash inflows and outflows so you can understand what’s happening. What adjustments can you make to increase the inflows and limit the outflows? For example, could you negotiate better rates with your suppliers? Could you invoice earlier? Where can you cut costs? How can you improve your payroll processes to keep cash flow continuity – and happy employees?


Ditch the debt:

Many businesses rely on some kind of debt. Try to manage this by ensuring that the cost of the capital you borrow is lower than the expected returns. Consider paying off the smallest debts first to free up funds to pay off the next smallest debt and so on, to create a virtuous cycle of ditching the debt.


Keep it separate:

It’s supposed to be rule number one, but in practice, few people manage to get it right. Try to keep your personal and professional finances apart, with separate cards and accounts for each. This enables you to track your business’ goal progression and performance far better.


It is important to remember that every business is unique and requires a custom plan. Consult a professional financial advisor for a holistic roadmap to review your finances right at the start of the new year.