Numbers Every Business Owner Should Know
As a business owner, you have a lot of financial paperwork to deal with. While some things are better left to the accountant, there are some numbers that you should be aware of on a daily or monthly basis. These numbers can help you predict cash flow problems in the future. And, of course, if ever there is a cash flow issue that your business can’t overcome, having a trusted lender on your side to help is important.
Business owners should always know your profit margins, which tells you how much profit you receive per sale amount before expenses are subtracted. This can vary depending on your industry, so compare your profit margins to similar industry businesses. By understanding the profitability of your products, you can better predict your company’s financial future.
Short Term Liabilities
While your business is profitable, you need to still make sure it can handle short-term financial issues. To figure this out, you need to divide assets by your current liabilities to arrive at your current ratio. If this doesn’t measure up, you may need to change the way you collect from customers or find a way to generate profits on a faster scale to keep up with your liabilities.
What to Do When Cash is Slow
If you have all the right numbers, but you find your business short on cash flow one month, don’t despair. You may feel you’re the only organisation going through short term cash issues, but you aren’t. Hundreds of organisations big or small reaches snags in cash flow. You can counteract this by turning to a lender in your area that understands cash flow problems. While a bank may be your first choice, consider this:
- Banks have strict requirements to qualify for loans.
- Banks can take weeks to approve a loan — which doesn’t help when you need cash now.
- Banks don’t typically approve loans for companies in cash flow distress after all, they consider your cash flow problem a sign of things to come.
Consider Bank Alternative
Bank alternative lenders aren’t like the traditional financial institutions. They don’t have outrageous requirements for their short term loans and they can approve your loan fast. When you use a bank alternative lender you get:
- Fast approval — typically in 72 hours
- No hassle applications
- Approval regardless of credit or business history
If you’re a business owner and your organisation is suffering from cash flow problems, call the specialists at ALC Commercial today. Our self employed loans could help. Through our free business loan consultations, our financial specialists can help you discover your business loan options.
Get back on track today and give us a call by dialing 1300 886 996 now.