Manage Your Inventory
Another important tip to minimize your debts, is to manage your inventory. Let’s say, for example, that you’re a trader who sells a variety of goods. Good inventory management means that you understand the individual demand for those goods.
You understand what moves fast, and what doesn’t sell. That should influence your decisions when you’re stocking up on items. If you don’t manage you inventory properly, you are going to lock up funds in goods that don’t sell. You need to concentrate on what moves.
You Need To Closely Monitor Relief Measures Announced By The Government
Every now and then, relief measures for businesses are announced by the government, banks and some private organizations. For instance, recently the Covid Alleviation Fund (CAF) was announced by the government. And it’s going to be disbursed by the National Board for Small Scale Businesses.
If you keep an ear out for such offerings from the government and your bank, you will give yourself the opportunity to get some support for your business; especially in times that are as difficult as this.
Look To Your Bank For Assistance
Last week, we talked about why it is important to build a good relationship with your bank. Assistance from a bank can help your business survive trying times.
As a banker herself, Ebella Whajah Ellis advises—that if you have trouble repaying a bank loan for any reason, that you go to the bank and discuss it with your bankers. Banks are more flexible than they appear, and the terms of your loan can be restructured to make repayment easier for you. You may even be given a grace period.
Identify Alternative Revenue Streams
You need to be open to adjusting your primary business module. We’re in times where Coronavirus has affected a lot of businesses. This means that if you don’t adjust where your income is coming from, there might not be any income coming in. Identifying alternative business that are in demand, even now, will help you keep cash coming in.
Protect Yourself From Scams
There are always going to be people who try to take advantage of other people’s anxieties and fears. If you receive any suspicious messages promising money for your business, you need to be on your guard.
Verify any messages from your bank that ask you for account details, personal details or anything else of that sort.
Finally, a step that you can take in order to keep your business out of debt is to seek advice on the whatever trouble your business is going through. People who have seen similar situations, or people who have been through them, might provide some insights that you would not have thought of yourself.
Discipline. Structure. Financial Management is Key.
—MRS RAMAT EBELLA WHAJAH ELLIS
The Entrepreneur’s Corner is a weekly series that brings you business tips and insights from people with real-world business experience.
Source: Africa Skills Hub