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Cash Flow

6 Points To Keeping A Firm Finger On The Pulse Of Your Numbers

I’m sure you’ve heard a thousand times before that cash is king, but for me there are a few fundamentals that keep your business healthy.

Warren Bonheim




Financial management is often not given the respect it deserves in determining the long term success of your business venture.  While budgeting and forecasting may seem tedious, it is an area of your business where you cannot cut corners.

I am no financial whiz; I have simply learnt the hard way that this is an area of the business you have to pay attention too.

I’m sure you’ve heard a thousand times before that cash is king, but for me there are a few fundamentals that keep your business healthy.

1Make the right choices

The more you sell the more money you need for cash flow. This is where you start, by choosing your products and suppliers very carefully. With anything product based, it’s essential that you negotiate hard on the terms of payment.

Even if you have cashflow, always use other people’s money to free up yours, especially if it’s without interest (free money).

There are a lot of pitfalls on contracts so if you are not a specialist, make sure you get good advice. Although I do encourage getting a facility from your suppliers, watch out that you don’t over extend yourself.

Related: The Correlation Between Cash Flow Challenges And Risk

2Budgeting and forecasting

Start your financial planning with sales forecasts and budgets and be brutally honest. The more realistic you are with your sales forecasts and overheads the better chance you have of reaching them.

Every business plan looks great on a whiteboard! Take your sales/profit projections and cut them in half and if you can still turn a profit then you on the right track.

3Financial goal setting

Financial understanding and management is also about setting goals, not the purchase of a Ferrari kind of  goal, but determining the amount of margin on products, the amount of staff, and staff salaries to deliver on what you sell, sales targets and incentives, skill sets required, operational running costs, possible CAPEX, predicting market changes and possible effects on margins and bottom line, forecasting for slow months, forecasting cash flow, obtaining the best rates from suppliers, negotiating terms to assist with cash flow, making sure you don’t over borrow.

You also need a financial management system set up that provides you the information you need to run your business.

4Get the right skills


Getting a great and trustworthy accountant is essential, even if it’s on a contract basis initially. A debtor’s clerk is a great investment, especially if you have a big book. What you forecast and budget needs to be measured, at least monthly to understand where you are.

This not only provides valuable information on how you need to manage your spending, profits and cash flow; it gives insightful information about how different areas in your business are performing.

Related: 10 Expert Tips On Managing Cash Flow As A New Business

5Plan for every eventuality

That “feel good high” on an exceptional sales month is often followed by high fives and big spending before the money is banked. An order book of sales can easily fall to half for many reasons.

Oversold solutions, bad credit record, buyer’s remorse etc., so be sure to put measures in place to reduce eventualities such as these. Always judge cash on hand as money in the bank, not on an order book.

Retain cash for those slow months. While you may be on a roll and think it will always happen, in reality slow sales months do come; make sure you have enough cash flow to see them through.

6The numbers are everyone’s business

Make saving money and running efficiently everyone’s business. By incentivising people and departments to reduce costs and reinvent the efficiencies of your business, you are sure to win.

You cannot singlehandedly watch every cent and oversee every process, so work on a profit split of money saved. This will create a culture where everyone has a vested interest in the company’s financial wellbeing.

Related: Employing Your Cash: Your Secret Employee

Here are some tips I believe every business entrepreneur should watch out for:

  • Never trust anyone else to release payments out your bank account.
  • Renegotiate with your suppliers on a regular basis, and make sure to pass on some of that savings to your clients. retaining an existing client is cheaper than finding a new one.
  • Keep 3 months’ cash flow in the bank no matter how good sales get, and don’t forget to increase that cash flow with your overheads.
  • Growth and increased sales costs money, don’t over extend yourself, even with the promise of big profits.

Lastly, no savings is too small. Lots of little crumbs make a big bread.

At 36 years of age Warren is the founder and CCO of Zinia, a highly profitable multi-million rand Internet Service Provider (ISP) and wholesaler that is growing 70% year-on-year since its inception in 2009. He started Zinia with his business partner Frank Mullen and from the outset ran the company like a big business with tight controls, a strong management team, statistics to inform decision-making and a process methodology that revolves around simplicity and innovation. Warren is the quintessential self-made entrepreneur: at the age of 22 he started and ran a PABX and Premicell business in the telecoms industry for seven years. His tech and business experience mixed with a passion for seeking “what’s next” is what makes him the successful leader he is today. Follow Zinia on Twitter.


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




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.




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.


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


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.



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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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.






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


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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