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Finding safe harbour when business is rough

Adrian Rasmussen • December 4, 2019

Australia’s economy is growing at a slower pace than many would like, with small businesses in some sectors doing it tough. In Dalby the drought has taken its toll on many small businesses, so it’s important to recognise the warning signs of potential insolvency as it is the key to trading through difficult times.

The ABC recently reported there are 2.1 million small businesses in Australia, with 54,992 of them going under in the 2017-18 year. Unfortunately it’s the retail sector which is the most vulnerable with retail companies folding at 1.5 times the rate of other small businesses.

The key is to address any problems before they get to this and there are a number of strategies you can introduce to get your company back on track. They include things as simple as making sure you have a good system to monitor your income and expenditure, seeking advice from your accountant and keeping in contact with your bank manager. In addition, you should keep a regular eye on your company’s performance so you can identify problem areas swiftly and nip them in the bud.

Preparing weekly cash flow forecasts can also help you monitor what has to be paid and when debts are due. It will stop debts getting the better of you. Think about paying bills weekly or fortnightly, instead of in bulk at the end of month.

You might want to also consider selling old or excess stock to help improve your cash flow and implement solid procedures to collect outstanding debts and stick with these strategies. Consider decreasing your payment terms (instead of 30 days from end of month, it might be 30 days from invoice date).

With Christmas and holidays just around the corner, we encourage you to support the ‘Buy from the Bush’ and ‘Stay in the Bush’ campaigns.  These are fantastic initiatives where you can support individuals, businesses and communities who are doing it tough in rural Australia with these unprecedented conditions. Simply by buying or staying in the bush, you can make a big difference keeping local jobs and goods and services in these communities. For more information visit their Facebook page>

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