1. Focus on cash flow

Put cash flow on the agenda for every management meeting, regularly update forecasts so that the director of the business is fully aware of the current situation. Also avoid breeching covenants of existing term loans or overdrafts. 

2. Ensure you have adequate financing in place.

Ask yourself if you have been forced to forego sales opportunities because of lack of working capital. If so, review existing facilities in the light of cash flow forecasts and consider whether increased facilities are required.

3. Have you got the most appropriate types of finance?

Consider all types and sources of finance such as asset finance, factoring, invoice discounting or mezzanine finance to expand your options of cost and flexibility. Overdrafts offer greatest flexibility but sometimes banks limit the amounts because of the specialised nature of the business' assets, particularly stocks and debtors. It is always worthwhile investing time talking to new sources of finance. Otherwise, when you come to have a review with your current finance provider it is worth preparing thoroughly to present a convincing case for a renewal or an increase. 

4. Undertake a business health check.

Take a detailed look at the direction your business is going in - its products, services, customers, suppliers, the markets it serves and its competition.  The reward for time spent on a review will be a convincing longer term business plan to present to key stakeholders. It will also help communications with staff, customers and suppliers, as well as finance providers and any external shareholders. 

5. Is this the time to consider a merger or acquisition?

If you are cash rich, explore ways to use surplus cash for the longer term benefit of the business. Perhaps consider an acquisition or merger overseas to enhance your presence in a major new market.

For further information including how to find a chartered accountant, please go to www.icaew.com

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