We all know from a business prospective, keeping things simple saves us time and is usually very effective for our businesses. A very easy to follow business cycle that we use, which can be applied to almost anything we do in our businesses is Assess, Plan, Do and Review …
This cycle can be used for almost anything – new products, IT, Marketing plans, Recruitment – but it’s very rarely used in Finance.
Keeping a very tight grasp on your business finances is key … without a strong cashflow, you may struggle to invest in your business and obtain the growth you’re working towards.
Your challenge – spend 2 hours this week on your business and prepare a very simple Cashflow & Budget for your business for the next 6 months by using the Assess, Plan, Do, Review cycle:
Assess … simply download your business current account for the last 3 months and see where you’re actually spending your money … there will be some surprises in there, I guarantee!
Plan … to very simply know what you ‘need’ to spend, and what you ‘choose’ to spend – there is a difference – make a list, record it in the easiest format you find you can work with, and plan to cancel those direct debits and subscriptions you forgot about!
Do … update your budgeted ‘expected’ income and expenditure as they happen each week – put a diary date with yourself for 1 hour every week – this will give you focus and control on your finances … did you cancel those direct debits? And you spend how much on coffee and sandwiches?
Review … at the end of the month 1, review how close you were to your budgeted forecast of finances, recognise where the changes were, tweak next month, and repeat …
A very simple guide to use, very effective, and will save you time and money … Being efficient in your business is a key performance indicator in every aspect of business – I did this exercise on my own business and cancelled 3 Direct Debits on subscriptions I no longer use – £100 per month saving, £1200 per year … that’s a couple of new computers for the business! Or funds the coffee spend (maybe not) … but seriously, by spending 2 hours on assessing our expenditure we saved £1200 … I couldn’t have invoiced that amount to a client for 2 hours work, so it is worthwhile investing time on your business finances to keep control of your Cashflow.
If you found this helpful but would like any further help or guidance on how to approach Cashflow & Budgeting, then please contact us. It’s what we do for all our clients. Running efficient businesses creates growth. We all deserve to be successful!
Unico 3 Limited
Accounts – Admin – Compliance
Telephone – 01922 214033
Email – firstname.lastname@example.org