In this guide, your SME will be able to make use of insights on:
- The importance of understanding your financial health
- What does financial health look like for SMEs
- How is SME financial health measured
- Common mistakes to avoid for the best possible financial health
- Services, Tools and Tech available to help
Download our complete Guide to Understanding Your Financial Health
The importance of understanding your financial health
All the decisions you’re making for your business impact your bottom line. It’s important to regularly review the financial status of your business to make sure you’re on the right track and to help with future decisions.
When a business is financially healthy it’s more likely to succeed. Every business needs internal financial controls to help ensure its money is properly managed. While outsourcing experts and using financial technology can be a good idea, it’s also best for you to know how to protect your bank account and your assets.
What does financial health look like for SMEs
The “financial health” of an SME is open to interpretation, depending on the industry, the stage of the company’s journey or the challenges it has faced. But there are some proven metrics that business owners, leaders, investors and other stakeholders can use to objectively assess the health of any company. Implicit in the financial health concept is the question of whether a business has “healthy” income, cash flow statements and a sound balance sheet.
Related: 5 Reasons why access to funding is important
How is financial health for SMEs measured
There is no standard set of metrics for determining an SMEs financial health, as most small businesses are privately held and are not required to release official financial results to the public. The good news though is that there are some well established methods to measure a smaller organisation’s health. Learn more about the most important indicators by downloading our latest guide.
Try to avoid these common mistakes for the best possible financial health:
- Lack of cash reserves
- Not having a cash flow forecast
- Not having a margin of safety between borrowing and debt servicing
See more here.
Related: 4 Ways to improve your business’s cash flow
Services, Tools and Tech available to help
As a business owner and entrepreneur, financial management may not be your area of expertise. This is why it’s advisable to consider using technology partners who can simplify, and often automate, specific tasks. It can also be worthwhile investigating local support service providers to outsource the more complex or labour intensive tasks to.
Download the full SME Guide here.
What can 60 days of cost-free* funding do for your business?
To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months. If prompted enter promo code LULA when applying.
