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6 Easy Ways To Take Control Of Your Finances

Before you go out and hire the best and most expensive accountant you can find, there are a few steps you can take to help you start better tracking your current financial state.

Josh Althuser

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Most people know that taking control of their personal finances can be tricky. And, for those who are running a business, it can get even more complicated. Keeping track of your expenses and forecasting your future finances is vital to any company’s survival. But before you go out and hire the best and most expensive accountant you can find, there are a few steps you can take to help you start better tracking your current financial state.

1The bigger picture

The financial health of your business isn’t solely dependent on how good your books look. Understanding your industry’s history and market trends will help you make smarter investments in the future. Reaching out to an experienced equity research analyst, especially if your business is growing, is an excellent way to carve out an accurate financial forecast. For businesses that are in debt, an equity research professional can help you develop a strategy that will pull you out of a poor financial state, while helping you make smarter financial decisions in the future.

Related: What Makes a Good Financial Management System?

2Cut back, but not too much

cutbacks

Businesses can do a lot of things to cut costs, but if you are going to do some snipping, make sure it’s just a trim. With so many tools created for the purpose of streamlining everyday tasks in the office, many of them free of charge, you can start making small cutbacks, replacing them with low-cost options.

Investing your resources into building a strong team, rather than too many bells and whistles is key. So, before you even start considering cutting back staff, sit down and consider what you really don’t need, like expensive software.

3Invest in your reputation

Taking time to invest in your customer is an excellent way to cut costs while also setting yourself up for a bright future. In the early stages, many businesses don’t think about customer relations.

They might be thinking too much about fine-tuning their product or applying for funding, but it’s well worth their time to invest in customer relations. Rather than spending a too much money on advertisements, focus on building a loyal consumer base. This can be done by offering promotions, or free trials of your product if possible. And don’t forget to follow up with your customers through email and social media. This is a savings tactic that cannot be done overnight, but if effective if done right.

Related: The Money School Weighs In On What’s Really Stopping You From Financial Freedom

4Build a network

Building a network is beneficial for many reasons in the business world. For small businesses, it’s essential to getting a leg up. Making the effort to extend yourself, by attending a meet and greet every once in awhile, can help you cut costs by making room for new knowledge and best practices.

Increasing your network can also result in potentially fruitful collaborations. With the rise of the freelance economy, there has been subsequent growth in the development of the shared workspaces, most of which offer various events for networking, professionally and personally.

Consider taking the whole team out for a training session, or a networking evening at your local co-working space.

5Embrace remote work

Depending on the size of your team and at what stage of development your business is in, you may want to consider letting your employees work remotely. As telecommuting has become increasingly popular, businesses have been seeing real benefits, including happier employees and less overhead costs.

Rather than renting out an office space five days a week, look into taking out a flexible lease, bringing the whole team together 2 or 3 days a week. In addition to lowering your business expenses, allowing your company to work remotely can decrease commuting costs and extras that can add up, like going out for lunch every day.

Whether you are hiring a professional financial expert to help you disentangle mismanaged finances, or looking to to simply tighten your budget, taking the time to invest in your story and professional network is step in the right direction.

Focusing of things like building brand awareness and allowing employees to work remotely are just some of the ways you can increase your network, which can lead to more opportunities and financial growth in the future.

Josh Althuser is a tech entrepreneur and open source advocate specializing in providing mentorship for startups. You may connect with him on Twitter.

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Cash Flow

The Simple Way To Pay Wages When Your Staff Don’t Have Bank Accounts

If you have employed casual workers over the busy season, you can pay wages even if they do not have bank accounts.

Absa

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At Absa Business Banking, the things that are important to you are just as important to us. We understand your business needs, which is why we have developed tailored solutions to help you where it counts. Take CashSend Plus, for example. It is a payment solution that enables you to pay workers even if they do not have bank accounts.

Related: Hiring Your First Employee? 5 Things You Need To Know

It is safe and secure

Your employee will receive a six-digit access code and a ten-digit reference number, so that they can verify the transaction. The money is instantly available at an Absa ATM.

You can even pay yourself

We have all lost bank cards or wallets at some point in our lives. What an inconvenience. Well, it is good to know then that you can access cash by sending it to yourself. Now, that is what we call better. 

Related: How Salary Transparency Empowers Employees – And When Not To Use It

Interested?

Please speak to one of our consultants or call 0860 111 123 or visit your nearest branch.

Absa Business Banking 

Do better business. Prosper.

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Cash Flow

Entrepreneurial Balancing Acts with Debt

Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders.

Harald Merckel

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Young South African entrepreneurs face many challenges when it comes to debt-related financing. Small and medium enterprise (SME) owners typically require extensive debt financing from bank and non-bank lenders. Unfortunately, many South African entrepreneurs are limited in their ability to access capital markets. Among others, the major challenges facing entrepreneurs include lack of credit history, no collateral, shaky credentials, and unformulated business plans.

Regardless, SA entrepreneurs are forging ahead and using multiple resources at their disposal such as payday loan providers, non-bank lenders, family and friends, crowdfunding and other economic empowerment initiatives to raise the necessary seed capital for investment purposes. Given the staggering unemployment rate in the country (+25%), the only way out for many people appears to be entrepreneurship. The 2008 global financial crisis threw the economy for a loop, and now the hopes and dreams of many South Africans hang in the balance.

Related: Every Tough Choice Has Management Debt – Are You Accounting For Yours?

ISM Study Sheds Light on SA Entrepreneurial Pros and Cons

An intensive study conducted by the University of Cape Town’s Unilever Institute of Strategic Marketing (ISM) found that the country is experiencing ‘a crisis of aspiration’. Simply put, many South Africans are struggling to attain their career objectives in an economy that has been ravaged by corruption, mismanagement, and scandal. Despite tough economic times, South African entrepreneurs are determined to try their luck. Pressing challenges in the form of rising unemployment, and an economy mired in failure are challenging entrepreneurs to be more inventive than ever before. The most volatile component of the economic spectrum in South Africa is the middle class.

Many South African families have lived the high life, or ascended the rungs and then been knocked down a peg. This instability is creating added volatility in a country where high crime, mismanagement and political rancour pepper the scene. For many entrepreneurs, any access to credit is a godsend. Banks and non-bank providers offering personal loans, business loans, or credit card funds invariably expose themselves to debt default. For entrepreneurs, it’s important to know where to draw the line. Access to lines of credit in a crippled economy is significantly more valuable than the equivalent access in a developed economy.

How to Know when you are Overstretched as an Entrepreneur

Debt is considered a prerequisite for investment purposes. Most South Africans simply don’t have the necessary capital to start up a high-tech venture, fund a new business, or conduct marketing and advertising activity. As such, lines of credit are increasingly being used to propel business activity among SMEs – both in the formal and the informal sector. However, once debt reaches untenable levels, the tough questions need to be asked. For example, if multiple loans and multiple payments are required monthly, revenue streams need to be evaluated against expenses to gauge whether this is a feasible status quo.

Related: How To Handle Your Post-Holiday Debt

Many entrepreneurs find it difficult to manage multiple loans simultaneously, although it is necessary to acquire the capital from multiple sources. One of the ways to deal with these types of exigencies is a single loan from a low-cost lender in the form of debt consolidation loans. Simply put, these loans are provided by bank or non-bank lenders at lower interest rates than the prevailing interest rate on other lines of credit. By taking out a debt consolidation loan, the entrepreneur has more disposable income over time by not paying the higher interest on credit card debt.

Escape Debt Before Debt Consumes You

There are several other ways to know when your personal financial situation has reached critical mass. For starters, the nature of your business may require you to continue dipping into lines of credit to maintain business operations. If you don’t have the requisite discipline to stop indebting yourself, you may not be able to get out of debt. Debt consolidation is only effective insofar as you have the necessary discipline to put an end to debt financing of all business-related activity.

Credit should be used sparingly, and profits should be generated to allow your business to prosper. In a tight economic climate, costs are the bugbear that need to be attacked. Lavish trappings are unnecessary for business functionality – modest budgets, and high-quality goods and services are far more effective than window dressing at a premium.

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Cash Flow

How South Africa’s Small Businesses Plan To Invest Their Money In 2018

Here are their five areas they should focus their attention on in the next year and beyond.

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Despite economic uncertainty, South Africa’s small businesses are positive about the future. In fact, our State of South African Small Business report reveals that 40% of small businesses are expecting to grow. However, to achieve growth without overextending their limited resources, small businesses need to invest wisely.

Here are their five areas they should focus their attention on in the next year and beyond.

Marketing

When times are tight, companies typically reduce their marketing spend. This isn’t the case for 36% of South Africa’s small businesses. These respondents recognise marketing as a critical investment area.

They’d rather make a concerted effort to grow their customer base, than sit still and do nothing as consumer demand declines.

Related: What To Consider When Investing Your (Hard-Earned) Money

Technology

Without access to the latest technology, business growth can quickly stagnate. This is why 23% of South Africa’s small businesses plan to invest in up to date equipment, whether that be new machinery, mobile devices or computers.

The right investment in this area can give a business a real competitive advantage.

It can help boost profits and improve operational efficiency – both of which can help a small business withstand difficult economic conditions with greater success.

Product development

Consumers are spoiled for choice. Their needs are constantly changing and companies can’t afford to become complacent. To keep up with market demands, 22% of small businesses plan to invest in product development. Barring a few timeless classics, most products need a regular review and tweak to stay relevant and popular.

Technology

technology-south-africa

Digitisation is transforming business functions across the board. Technologies, like cloud software can take care of laborious administrative work.

Related: How To Make Money Investing, According To Ashton Kutcher

This liberates employees from time-consuming tasks, enabling them to focus on more strategic work like customer retention and acquisition.

Technology has the power to improve productivity and efficiency. Which is why 18% of small businesses are going to focus their investment plans on this area of their businesses.

Customer service

The customer should always be the priority. It doesn’t matter how good a product is, if there are no customers, then there’s no business. As competition increases, the user experience becomes more and more important to win over customers.

Business growth depends on happy customers and to achieve that, 18% of small businesses plan to invest in delivering better service.

All five of the above business areas are worthy investment focuses. The question is, how does a small business work out what to invest where? The only way it can invest effectively is with a full view of its company finances. A small business needs to be able to see which functions have provided the best return on investment to date.

Related: 12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

It also needs to consider how much investment capital it has to spend. What’s more, before it makes an investment in say, marketing or product development, it must know exactly how and where the money needs to go.

The right software can help a small business access the real-time insights it needs to make better, faster financial decisions. To combat increased competition and market uncertainty, South Africa’s small business owners need access to up-to-the minute information from any device no matter where they are. An informed investment has the greatest chance of success.

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