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Cash Flow

Sit-Ups for Start-Ups

Keep your business financially fit.

Gary Epstein




It’s a fact that one in three new businesses don’t make it past their first birthday. Some say it’s due to starting a business for the wrong reasons, while others claim it’s a lack of planning or perhaps overexpansion, and so on.

For me, the inability to manage finances successfully accounts to many start-up failures. 75% of new business start-ups still rely on pen and paper or spreadsheets to track their business performance.  The majority of start-up entrepreneurs have limited knowledge about the financial side of starting a business.

Many a profitable business on paper has ended up in bankruptcy because the amount of cash coming in does not compare with the amount of cash going out. Understanding the welfare of your business requires more than looking at the total Rands coming in verses the total Rand going out.

Up your acumen

To maintain a level of financial fitness towards a successful business the following steps need to be implemented:

  1. Getting the right tools
  2. Be prepared
  3. Establish a routine

Having the right tools from onset will save you both money and time. Be focused and define your priorities, book time in your diary, use an old fashioned paper filing system and a good back up system. Hardware is easy to replace, while data and everything you create on your computer, usually is irreplaceable.

Then your accounting software needs to be selected with care. If you are not from a financial background, finance can be scary, and all too often ignored. You need to select software that is easily comprehensible and as the company grows, the software will grow with the company.

And as your finances become more complex, and you need an accountant or bookkeeper, you’ll still have the ability to check the company’s financial health daily, weekly and monthly.

Related: Are You Financially Organised or Totally Disorganised?

Cash is king

As the mantra goes in business, cash is king. Ensure that you forecast projects six to nine months into the future. Financial fitness within your business is the ability to understand all of your financial matters. Measuring in on the basics of your company’s financial position on a daily basis is more than just a to-do item, it’s a necessity for your future.

A healthy company generates a positive cash flow, meaning the money coming in exceeds the money going out. Checking up on the health of your business requires more than just the numbers in your financial statements – build an annual operating plan and have it in place before the next financial year.

Developing close and honest relationships with your suppliers is critical. Arrange payment terms from the onset and ensure that they are regular. If you miss a payment, communicate and give them a reason why. And advise them when they can expect payment. Never avoid a suppliers phone call.

If you need financing, question whether it is the right kind of financing and be realistic about the amount of financing you need to get up and running. When it comes to securing money to start, expand, or just continue your business, you’ll need to choose wisely. Some options will be too complex, and others too risky.

Remember that if it sounds too good to be true, it probably is. If you have a credible business plan, you may be able to borrow from a bank. If your business is likely to have peaks and troughs in its cash flow, it’s essential to be able to clearly illustrate these to your bank. Banks want guarantees!  Don’t over extend yourself; remember you will have to pay it back.

Related: Setting Your Financial Records Straight

Real value to clients

The day will come for most new business owners when they will need to hire somebody. Recruiting staff is an essential skill for any growing business and one that small companies cannot afford to get wrong. Hire professionals who feel strongly about what they are trying to achieve and that know your business.

Ensure that you have a position description so that your new hire knows what your expectations are.

Finally, establish a routine – daily; weekly; and monthly. Even if you are a one man business have a monthly ‘board meeting’ with yourself, and finally a quarterly review. A healthy business knows what its differentiator is that makes it competitive. Always remain focused in your specific niche area.

This provides more value to your clients because you have honed your expertise in an area relevant to them, and second, you limit the competition you face. Successful and financially fit companies have a business plan in place and a realistic forecast with healthy cash flow.

Gary Epstein is the MD of EasyBiz, the distributors of QuickBooks Accounting Software in South Africa and Sub-Saharan Africa.


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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