Cash
or money is important to the proper, effective and smooth running of
any business or enterprise. It is, therefore, safe to say that without
money, your business will collapse.
Delayed payment
After
providing a service, you expect to be paid immediately, this is not the
case most times. You offer your service and get paid later. However,
this is not good for your business. In fact, if your clients pay very
late, your debt profile will steadily rise. To reduce the effect of late
payment, set a timeline for your clients or customers to make payment
and use your relationship with the manager to encourage him or her to
pay you as early as possible. You can also reduce the credit you offer
your customers.
Decline in sales
The
reduction in sales can have a huge impact on profit. As soon as you
notice a decline in sales, you may need to check your marketing strategy
again. You can also take advantage of social media. You don’t need to
break the bank to boost sales again.
Low profit
Profit
is directly linked to sales. You should not be too surprised if your
profit has been hit. The Nigerian economy is trying to recover from its
first recession in 22 years. Besides, some businesses have declared
losses. This is why the business should have savings to cushion the
effect of the lack of profitability. Also, you may need to adjust your
growth forecast.
Seasonal demands
There
are some businesses that are seasonal. Seasonal in the sense that there
are certain months there is a monumental spike in turnover and in other
months, it will reduce. For example, there is always an increase in
hotel bookings during public holidays and the festive period. This is
same for transport. You have to plan your cash for this period so that
there is no lacuna.
Overtrading
This
usually affects small businesses that are just opening a shop. Most
times, these businesses invite customers and friends and offer them a
good discount to promote patronage. The turnout may be massive and it
may affect your cash flow because so many people are taking advantage of
the discount. The rule here is to try as much as possible to make your
launching very simple and don’t offer any crazy discount.
By: Adeniyi OGUNFOWOKE
PR Associate
PR Associate
Cash Flow Issues Your Business Is Likely To Experience
Reviewed by Jejetv.com.ng
on
3/06/2017
Rating:

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