2021 is another year, and it may be as critical as 2020 due to the second wave of the Coronavirus pandemic. Already, Nigeria is in the second phase amid increasing infection figures.
Most businesses still feeling the after-shocks of the Covid-19 lockdown and restrictions last year. By managing expenses, maximizing margins, and building a steady customer base, thereby ensuring steady revenue, small businesses and SMEs, alike, can ensure positive cash flow balance.
To ensure that your business is less impacted, business owners need to pay close attention to their cash-flow situation to ensure continued success in the new year.
Here are five tips that may help you monitor and ensure adequate cash-flow during this year:
1. Build cash reserves
Businesses need to avoid unnecessary spending as early on in the year as possible. Saving money every month will ensure end-of-year expenses do not completely deplete any savings the business may have.
2. Reduce expenses
COVID-19 has strained the finances of numerous businesses. As business owners, find means to ensure less impact on your expenses. For instance, if jobs can be done from home, allow your staff to continue work from home. This will help reduce office stationeries and other office associated expenses that may eat deep into the company’s purse and revenue.
3. Reduce slow-moving stock
Some inventories are slow-moving stock, try to do away with them for now. By doing this, you try to prioritize your investment and business alongside current needs and trends. Don’t store goods or items for long as looming lockdown and restrictions can still impact them.
4. Ensure prompt payment
Make plans accordingly for customers that continuously pay their accounts late by contacting them well in advance, invoicing them early, and reminding them to pay on time. Try as much as possible to ensure prompt payment of services rendered to clients and customers.
5. Identify with your locals to plan business ideas
One of the fundamentals of entrepreneurs is that you can switch business focus. Due to the impact of the pandemic, customers are not moving as far as they should do. Businesses are now locals. That’s why local businesses such as grocery stores and corner shops have seen a whopping rise in trade during the pandemic. This looks set to continue throughout 2021. Try and identify how you want to solve a local issue with your business and service. Key into local ideas and survive the pandemic.