WATCH OUT FOR “OVER-TRADING” AS WELL AS “OVER-EATING” AT CHRISTMAS!

WATCH OUT FOR “OVER-TRADING” AS WELL AS “OVER-EATING” AT CHRISTMAS!

Johnny Martin

Did you know that over-eating Christmas lunch can add up to well over 6,000 calories… at least you can work this off with a brisk walk (about 12 hours at 6mph!) But over-trading can be permanently disastrous for your business. Over-trading is where a business takes on too many orders, which despite being profitable, the business just hasn’t got the Working Capital to finance. What is working capital? Basically it’s the cash that should be in your bank account but at the moment it’s in someone else’s!

PITCH DECK CHECKLIST TO SECURE CASH!

PITCH DECK CHECKLIST TO SECURE CASH!

Johnny Martin

It takes a lot of time and effort to get an opportunity to pitch to investors. The pitch deck is a key tool to help secure their interest and recently I’ve seen a number of pitch decks which made some fundamental mistakes. So use this checklist to increase your chances of success.

BALANCE SHEETS – MEASURING BUSINESS BUOYANCY!

BALANCE SHEETS – MEASURING BUSINESS BUOYANCY!

Johnny Martin

If you are trying to get a loan or raise equity finance, one of the first things you will be asked for is a Balance Sheet. However, 80% of people in business have no idea what a balance sheet is. Even Deborah Meaden got it wrong recently on Dragons’ Den when she started explaining how sales would appear in your balance sheet. They don’t!

WHY HUMOUR HELPS CASH FLOW – WITH THANKS TO THE ROYAL MARINES

WHY HUMOUR HELPS CASH FLOW – WITH THANKS TO THE ROYAL MARINES

Johnny Martin

The Royal Marines Hasler Company is the naval service Recovery Centre. The objective of the centre is to administer a bespoke recovery pathway for every soldier and to provide effective assistance and support for the soldiers and their families. For many soldiers trying to get a civilian job is not going to be an option and starting a business may be the only way they can create a viable economic future.

CASH FLOW – FOR FUNDING, IT SOMETIMES PAYS TO THINK LOCAL

CASH FLOW – FOR FUNDING, IT SOMETIMES PAYS TO THINK LOCAL

Johnny Martin

An entrepreneur was recently introduced to me asking advice how to raise money. She had spent nearly £8,000 with so-called advisors who over a year had failed to produce a plan or an investor meeting.

These advisors weren’t obvious cowboys but prosperous looking retired company executives who had claimed they were writing a plan for wealthy investors they knew…caveat emptor you can hear me say.

HOW FINANCIAL ROUTINES CAN GENERATE BIG “MARGINAL” GAINS IN CASH FLOW

HOW FINANCIAL ROUTINES CAN GENERATE BIG “MARGINAL” GAINS IN CASH FLOW

Johnny Martin

The success of British cycling under Dave Brailsford is attributed to his relentless, relentless, relentless pursuit of even the smallest marginal improvements. As a result the team benefited from what he describes as “the aggregation of marginal gains”. By this he means that if you improve every aspect of an activity by even a small amount then cumulatively this will add up to a big improvement.

UNDERSTANDING THE TYPES OF PROFIT

UNDERSTANDING THE TYPES OF PROFIT

Johnny Martin

We all know the expression “Cash is King” – but often people forget today’s cash is driven by yesterday’s decisions on pricing, “ingredients” and running costs, all of which determine profit.  The Profit and loss report gives you the information to track and manage your sales and expenses and help  you  run a profitable business.

WHY A REALISTIC SALES FORECAST IS CRUCIAL FOR YOUR CASH FLOW

WHY A REALISTIC SALES FORECAST IS CRUCIAL FOR YOUR CASH FLOW

Johnny Martin

If there is one crucial piece of financial management you must do at whatever stage you are in your business – you must prepare and regularly update a cash flow forecast for at least the next 9-12 months. And the most important line in the cash flow is the sales assumptions – being up or down on sales will have a direct and possibly major impact on cash.

KEEPING YOUR RECEIPTS (SENSIBLY) SAVES YOU CASH

KEEPING YOUR RECEIPTS (SENSIBLY) SAVES YOU CASH

Johnny Martin

The admin of running your business can seriously take the fun out of being in business unless you are careful. Obviously getting paid is the biggest pain, and next? Well I reckon keeping track of your receipts. At the end of the week there they are stuffed in your wallet, in the footwell of the car, in pockets of your jacket – and if you don’t get a system to record and file them you will lose cash. You can’t claim an expense on your tax return without a supporting “voucher”.

USE XMAS DOWNTIME TO BOOST CASH

USE XMAS DOWNTIME TO BOOST CASH

Johnny Martin

The start of the year is a good time to tighten up on cash – but its much more effective to do this before the start of the year.  That way you will hit the new year running!  So why not use some of that xmas downtime to look at these areas:

  1. Give your personal budget a makeover – the less you have to take out of the business to fund your lifestyle the less pressure you will be under.  Here is a great budget spreadsheet courtesy of moneysavingexpert.com

HOW FLAT RATE VAT SCHEME MIGHT SAVE YOU CASH!

HOW FLAT RATE VAT SCHEME MIGHT SAVE YOU CASH!

Johnny Martin

As this article is about VAT – I am unusually going to start with a health warning. Don’t mess with VAT authorities – if sales of your business are likely to be £81,000 or more you have to register for VAT. And while most of VAT is straightforward there are lots of wrinkles to catch you out – so take professional advice before you get in trouble. Getting a bad VAT record is actually a real pain – eg it will lead to more frequent inspections etc.

WHY PERCENTAGES (AND RATIOS) CAN SAVE YOU CASH!

WHY PERCENTAGES (AND RATIOS) CAN SAVE YOU CASH!

Johnny Martin

There is a common misconception that an experienced finance person can look at a set of management accounts and highlight one or two numbers that indicate the health or otherwise of the business.

But this isn’t how it works – because every business is different and has different relationships between the numbers.  So what is important is not the absolute values of individual numbers but to establish trends – and this is where percentages (and ratios) can really help you.

LET YOUR CHART OF ACCOUNTS SAVE YOU CASH

LET YOUR CHART OF ACCOUNTS SAVE YOU CASH

Johnny Martin

Your chart of accounts (CoA) is the list of headings (or homes) that your accounting package uses to categorise your business income and expenses. By grouping transactions in sufficient detail you can really understand whats going on in your business.  For example rather than just recording  marketing as a lump sum, break it down further eg Pay per click, PR, trade shows etc.

GOOD DOCUMENTATION SAVES CASH

GOOD DOCUMENTATION SAVES CASH

Johnny Martin

January can be a pretty tough month for trading after the hump of Christmas – unless you happen to be a fitness coach or selling diet supplements…so as well as reviewing your marketing plans, use the time to make sure you have all your business arrangements properly documented. In my experience more cash is lost because of unclear and undocumented business arrangements than any other reason.