For a company to survive and become successful it needs to stick to the simple formula

Cash Revenue > Outgoings

Any company however large or small stays in business if it can maintain this formula.

Throughout this journey it is essential to de-risk your business to allow it the freedom to grow and protect yourself if it doesn’t.

How do you score?

  1. 15% dependence on any client or supplier. This should be a maximum of 25%.
  2. No Personal Guarantees
  3. Always have a Plan B and a cut-off to Auto-enact
  4. Have a Cashflow buffer of in excess of 2 months overhead cover or more
  5. Always bank your business and personal bank accounts with different banks
  6. Never operate a negative Directors loan account
  7. An average of 3 months positive cashflow where more revenue has been received than paid
  8. Not be owed any revenue by your company. Never forgoe a salary without documenting a loan in the company accounts for doing so
  9. Never take loans to cover poor trading without direct action to ensure short-term cashflow positivitity
  10. Always have a Cashflow and Budget in place which is regularly updated and reported

There will be times in the growth and establishment of a company where these rules will not be adhered to. If your company operates with any of the points above then it is carrying excess risk. For a company to create balance then these rules need to be monitored and flagged when out of balance.

Score 10% for each area not covered

70% – 100% – You are operating a High-risk strategy

30% – 60% – You are operating a Medium-risk strategy

Under 20% – You are operating a Low-risk strategy

  You may pay to do college homework have a general if somewhat vague idea of the content, unless of course you found it extremely interesting

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

clear formSubmit