Managing Small Business Finances

Always work on the basis that you’ll need more than you actually do.

You often only have one chance of raising money so remember that when working out your figures. If your figures are too conservative, it could have a huge impact on the future of your business.
The bank is not the only place to get money.

Having said that, don’t go anywhere near Loan Sharks but always keep in mind that other resources can be available.

Cash Flow
If you’re having a problem with cash flow, contact all the people that it may affect,
Customers and suppliers. Try to re-negotiate term where possible but make sure that you
can afford the new payment terms. This will help to maintain trust.

Never give credit
You haven’t made a sale unless you have received the money for it! Never give credit would be a hot tip but if you do go down that route check out references from other suppliers. Also make sure that payment conditions are included in the bill of sale.

Keep the important people in the know
Banks, Inland Revenue etc will be more sympathetic if you keep them informed. Even if that means just dropping emails to people or giving them a quick ring. Keep those contacts open.

Chasing those debts
Make sure you have a procedure in place for chasing non-payers. This could be a an invoice followed by a ‘phone call and then another invoice including an admin’ charge if this is what you want to do.


Forecasting and estimating for your business is essential but remember that it need to be Realistic. It’s sensible to forecast monthly but if things get tight this can be done either monthly or daily if necessary.


Despite being a tedious task keep a record of everything!!!! Telephone calls, receipts, orders, payments, bank statements. EVERYTHING. Track all money coming in and out of your business. Utilise one of the many software packages that are available.

Even if you do not get your funding from a bank, you will still need to use one. However everybody is in the market now to get your custom so make sure you shop around for the best deal. Read all the small print so you know when any low interest rates are due to end. It does not good business sense to be loyal to any bank. Always get the best deal you can.

Negotiate, Negotiate, Negotiate
Negotiate on everything – interest rates, payment dates, minimum/maximum orders. Etc.It never hurts to ask and “if you don’t ask you don’t get!