At Together Business, we're all about helping social enterprises like yours navigate the ins and outs of finances. In this part of our blog series, we're diving into a key aspect: how reviewing your existing debts can save you money and boost your cash flow.
To get started, gather all your current financial obligations. This includes things like loans from banks, mortgages, finance company loans, hire purchases, and credit card debts. Leave out any money owed to suppliers. Write down how much you owe, the interest rate you're being charged, whether the rate is fixed or changes, and how long you have to pay it back.
Think about combining your debts into one if you can, and stretching out the time you have to pay it back. This can free up cash for your business to grow or just cover your day-to-day expenses and personal spending.
If you're finding that the money you take out of the business for yourself is putting too much strain on your cash flow, it might be time to reassess. Maybe your business needs to make more profit to support your spending, or perhaps you need to put some money into the business to help it grow.
Take a close look at your personal spending habits. Make a list of everything you spend money on each year, like rent, childcare, groceries, and eating out. You might be surprised by how much it all adds up.
Sorting out your debts and how you're funding your business can make a big difference to your cash flow. We can help you work out an updated personal budget and Cashflow Forecast to see how much extra cash your business could have with a few simple changes.
Forecasting might sound tricky at first, but it's one of the most important tools for your business. We'll walk you through it, so you'll feel more confident about your financial future and sleep better at night. Let's work together to make your business finances stronger and more resilient.
