By Keith Steven

You’ll be familiar with the workload of a small business director; there always seems to be something to do, or a problem to get you out of bed at 4:00 a.m. There are some issues you can’t ignore, such as your office being broken into or your phone signal being disrupted. However, there are some problems which seem to get swept under the rug for examination on another day in the future.

As honourable as your intentions are, your priorities and those of others are not necessarily in line with one another. For example, a letter from a bank might sit unopened on an in-tray, and there might be another one from the bank that you just haven’t had time to read yet. These situations are very plausible for small business owners, but there is a very good reason not to ignore communications: your business might be going bad.

The letters and calls that you put off until later might be warning you of a loan refusal or a penalty for late PAYE reductions. These problems might seem minor in isolation, but in the long run many of these issues combined could lead to insolvency. That’s why being proactive can help you to remain afloat and successful in your small business.

I’ve put together some warning signs you can look out for; if you relate to any of these, you should take control of the situation now before it progresses to a more difficult one. It’s in the best interest of you, your employees and even your family members.

You’re having problems with your bank.

If you’ve relied on your bank in the past to help you with business loans, overdrafts and credit cards and they’ve stopped being forthcoming with funds, you’ll need to ask yourself why. Late payments, penalties and poor account management might have made your business too risky for them to help you. I would advise making an appointment at your bank to discuss any issues as you’ll want to stay in their good books for the future success of your business.

You owe money or you’re owed money.

If your business has debts that you can’t pay off, you might be receiving daily calls from creditors who are trying to get the money back from you. Along with this you might be getting red warning letters through the post. Speak to them about your situation and agree to pay off the debts in smaller amounts — this is so much better than avoiding the problem. On the other hand, if you’re owed money by customers (debtors) you could look at doing a couple of things:

  1. Introduce a strict policy for debt collection built around specific target dates.
  2. Make sure you have a proper application form/contract and terms & conditions that new customers will check and sign. If an account does go bad, it is vital that you are able to prove the trading terms, agreed between you and your customer. A ‘verbal agreement’ will unfortunately mean next to nothing when chasing someone for money.

You don’t have a working business plan.

Planning and organisation are essential in business, so you’ll need to have a business plan in place and refer to this frequently at management and board meetings. You should know the key statistics of your business such as your gross profit, bank balance, customer acquisition and loss, your sales cycle, and anything else that applies. These points are the foundation of your business so they need to be solid. When you add layers on top of these, you want the structure to be supported all the way from the bottom. And because you’re so busy, don’t forget to delegate — many hands make light work.