When we add up our pension savings, property values, and investments, there are 3.6 million ‘millionaire households’ in the UK. This figure is up by 29% in 2 years, according to the Office for National Statistics.
Small businesses can also use their assets to calculate how close they are to millionaire status. Everything from your furniture and equipment, to patents and inventory can be classed as assets that drive up the value of your business.
Being Smart With Stock and Inventory
Depending on your business, your inventory might be made up of lots of low value items or a smaller number of high value items, or potentially a mix of the two. Spending too much on inventory can mean you have ‘dead stock’ and less healthy cash flow. Seasonal changes and differing customer demands can mean inventory that once seemed promising is now becoming harder to sell and taking up valuable space.
Making use of inventory that’s hanging around can turn money you’ve already spent into profit, or at least free up some of your stock room. If you have an online presence, you can reduce the price of stock you need to get rid of to ensure it doesn’t lose all value. If your business type lends itself well to online reviews and vlogging, you could even send stock out to social media influencers, use them as promotional giveaways, or include them with existing products as a bundle.
Owning Vs. Renting?
Buying premises is a massive decision. You’ll need to be able to save a substantial deposit, you won’t be free to locate whenever you want, and any fall in its value will hurt your business capital. On the other hand, you’ll have more control over your business and can sublet to generate extra income, your capital increases if it gains value, and you can renovate as you see fit.
Any increasing value of your business premises is entirely yours to benefit from if you own the space, but those who want to take a flexible approach might find they’re too tied down.
Protecting Your Cash Flow
The costs of running a business can seem endless, and depleting cash flow is the reason why 80-90% of businesses fail. A small portion of your outgoings will be unavoidable and fairly inflexible, such as business rates. Most are negotiable and changeable, providing you’re willing to spend some time on them.
Energy bills on a variable tariff can cost far more if you don’t take the time to renew a fixed contract, your suppliers won’t reduce their prices until you ask them to do a good deal for you, and letting invoice payments come in late over and over again won’t bring cash in any faster. Many of the factors that negatively impact on cash flow can be addressed, as long as you know the cause.
Your business can grow and acquire more valuable assets with some help from Capify. Depending on your monthly turnover, your business could raise between £3,500 and £500,000.
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