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If you’ve tried to get new lending or renew an existing loan you will know how hard it is right now. As a result of the credit crunch, banks have pretty much ‘shut up shop’ in terms of business lending to both small and medium sized businesses. If you’ve got a basically viable business with great prospects this can be very frustrating.

Lack of lending means you can’t grow your business as quickly as you would like. You can’t afford to do the marketing you would like, and you can’t employ more people to provide the goods and services your customers want to buy.

You’ve got to think a bit ‘outside the square’ to come up with ways to manage growth from business cashflow and find ways to create efficiencies in your business. You need to free up cash from inefficiencies that may have become entrenched when cash wasn’t an issue.

There are two places (financially speaking) where you can improve cashflow and find efficiencies in your business:

• Your Profit & Loss
• Your Balance Sheet

Profit & Loss

Sales
The 80/20 Rule- Look at what you are selling i.e. products and services and determine which ones are making money and which aren’t. If you want to grow you need to grow the profitable lines. It’s the old 80/20 rule – concentrate on the 20 percent of customers, products and services that provide 80 percent of your profits. You may need to sack some customers! If they are not profitable you shouldn’t be worried about them going to the competition.

Internet Marketing - can be much more cost effective than traditional forms of marketing. There are many ways to attract visitors to your website, and some of these are quite cost effective. Remember though, you want qualified traffic, not just traffic, so be specific about how you attract your visitors. Google Adwords, copywriting that takes your specific Keywords into account and targeting Blogs and Forums that your potential customers frequent will all help boost your qualified website traffic.

Direct Costs
Look at what you are buying i.e. products and services and spend some time investigating and negotiating better deals and more efficient ways of delivering. One example is a business that delivers goods to customers weekly. They managed to agree with most of their customers to drop back to fortnightly deliveries – a 50 percent cut in one of their major costs! Think laterally about better ways to achieve the outcome.

Don’t underestimate your value as a customer- don’t be afraid to shop around for other suppliers. If you are a good customer they will be bending over backwards to supply you at the right price.

Overheads
This is an area where you can make massive savings. Do a review of all overheads and ask yourself these questions

• Why am I spending this and what ‘value’ does it deliver onto the bottom line? Should I cut it out?
• How could I do this differently to achieve a similar result?
• Who else could deliver this product or service and how much would they charge?

Purchase Orders
Introduce a Purchase Order system into your business i.e. no money gets spent unless you, the business owner, approves it. It may sound tedious but the resulting savings will far outweigh any tedium.

Balance Sheet