It’s hard to believe that any business could go broke in a boom time, especially like the ones we are experiencing now and yet they do, but why?
When we are in boom times, our trade businesses are so busy, it becomes easy to take the eye off the ball. We become flat out trying to keep the balls in the air, we simply do not have the time to take a good look at our cashflow to ensure we’re working profitably.
If we feel like there is plenty of money coming in, complacency can creep right into our every day, and yet it often masks the real picture.
A lack of productivity and not watching expenses can have our budgets blowing out and creating cashflow holes that we don’t see coming.
When we can plan for a dip or a hole, we can put steps in place to help us ride through those times, however if we are not keeping an eye on where our finances are at, that can get away from us really quickly!
So what can you do to prevent becoming one of those businesses?
There are a few systems you can put in place right now, that will allow you to see into the future.
First up, is regularly forecasting your cashflow and your work flow. Our Tradiepreneurs have been working on keeping this in advance by 3 months at a minimum. This allows them to see the holes, and fill them in before they drive over them!
Understanding how your workflow is looking, provides you the information you need to make decisions as you need, rather than scrambling when the pressure is on.
Following on from understanding your cash and work flows, we suggest you start saving time that you are currently wasting quoting for the wrong clients, by putting a sales process in place.
A good sales process will allow you to screen potential clients that don’t fit BEFORE you take the time to visit their site and spend hours preparing a price for them. It will also allow you to educate those who fit with your workflow, on how you work with clients, wait times etc. all reducing the amount of time you need to spend keeping them satisfied.
Finally, having a debtor’s process that keeps you invoicing as soon as the work is completed and chasing up until the invoice is paid in full prevents nasty cash gaps from work not being invoiced and paid.
It’s tempting to book yourself out when the business is so busy, and yet keeping tight on some of these basics can not only free you up time, but keep you in control.
Need help during your busy time? Book a free, no obligation chat about where you’re at, where you’d like to be and whether we think we can help.
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