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Home > The Small Business Economic Crisis Financial Management Plan
The Small Business Economic Crisis Financial Management Plan
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Reduce cash out
Cancel expenses that have little or no business benefit (subscriptions/entertainment)
Cancel expenses that have little or no personal benefit (reduce your personal income need)
Renegotiate terms with required recurring and one off expenses (rent, HP)
Seek terms/extensions from suppliers
Make time to Pay arrangements for outstanding tax
Defer VAT until March 2021
Defer Income tax 2nd instalment until 31 January 2021
Increase Cash In
Proactively address cashflow forecasts to identify pinch points so they can be managed
Consider all possible payment options from debtors. (Financing, credit card, gocardless, cash discounts etc.,)
Use the “what can you afford?” strategy with high risk clients.
Prioritise your family income needs over your business income needs. (for the moment)
Don’t take on new debt to maintain “business as usual”
Use extreme caution if borrowing to make high probability returns
Use extreme caution with borrowing to bridge short term cash flow dips
Renegotiate debt for better terms, (interest, instalment frequency, length of loan)
Consolidate and refinance debt
Check your personal financial credit rating and improve if possible
Avoid credit card debt (avg. APR 17.3%)
Schedule regular financial debrief with financial/profit advisor
Evaluate offering mix where possible, focus on high margin products/services (reduce/remove low margin)
Evaluate client mix, focus on historically well paying clients
Enhance communication rhythm with clients, more frequent and shorter.
Use downtime to plan future strategies
Plan & create marketing campaign for after lockdown
Market to potential customers leaving your competitors
Enact “bold” moves- amplify marketing, focus on increasing profits
Set up new general ledger accounts for unique circumstances (eases reimbursements & recasting)
Evaluate stock turn, tighten turn on moving product, eliminate non moving stock.
Review accounting system- collection of automated invoicing. (Frequency)
Conduct comparative analysis of prior years, months (distinguish cause and effect)
Evaluate client history to proactively determine where you can make terms concessions.
Ensure all allowances and reliefs are claimed (capital allowances, R&D, EIS etc.)
Contact HMRC to arrange time to pay for any outstanding debt, ask for interest waiver.
Open a separate “tax account” with your bank
Treat Income payments on account as due on 31 July, pay to the separate “taxes” bank account
Treat VAT due before 30 June as due but pay to the “tax account”
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