- Get organized: One of the most important things you can do for your small business is to get organized. This means creating a system for tracking your finances, your inventory, your customers, and your employees. Once you have a system in place, you'll be able to run your business more efficiently and effectively.

- Set goals: Another important resolution for small businesses is to set goals. Without goals, it's difficult to measure your success and determine what areas need improvement. By setting goals, you can ensure that your business is always moving forward.

- Be more efficient: One of the best ways to improve your small business is to be more efficient. This means streamlining your processes, automating where possible, and always looking for ways to do things better.

- Focus on your customers: One of the most important things for any business is to focus on its customers. This means providing them with excellent customer service, developing strong relationships, and always putting their needs first.

- Stay positive: Finally, it's important to stay positive when running a small business. There will be challenges and setbacks along the way, but it's important to maintain a positive attitude and keep moving forward.

In business, the present can often seem like the most important thing. In any organisation, there is a huge amount to do day-to-day and if things are going well, then it can seem like everything is on the right course.

Considering the future, however, can fall into the long grass and go forgotten. This is a mistake many smaller and medium-sized enterprises make. And then, when cash flow issues arise, they become a crisis.

In this article, we’ll look at why and how it’s of the utmost importance for businesses to have a clear picture of their cash flow forecast.

The Why

It is important for SMEs to understand and know their cash flow forecast for an array of reasons. One of the most important is because smaller enterprises are most vulnerable to shortages of funds, precisely because of their size.

The pre-trading period for smaller and medium-sized businesses can be a minefield. This time sees a business taking on costs without initially having any revenue incoming. This can also include marketing costs, which can seem like a sunken cost at the time. Until sales start turning into revenue, this is a risky period. Smaller businesses in their early stages also lack retained profits and suppliers regularly demand early payment for goods.

This is the time to develop good cash flow forecasting habits. It establishes a model going forward, always putting the future at the forefront of plans.

The How

With some foresight and reflection, it’s not hard for a business to see where it will be in a month, two months or even a year down the road.

Simply having a rolling, forward-looking plan is a big step in the right direction. Profit and cash flow forecasts, if accurate and realistic, make it far easier to plan new strategic moves and investments. They also mitigate unexpected shortfalls and the attendant stress.

Once a forecast model is in place, it becomes much easier to identify problem areas in the business. Moving quickly to identify the causes of poor cash flow can save a business before a crisis develops. This might take the form of tardy incoming payments or the cause might run deeper. Either way, you’ll have the tools and insight to address the issues identified.

With all this in mind, there are simple steps to take in order to gain an accurate forecast and get a clear picture of where finances lie now and where they will be in the future. Make a list of all payments outgoing over a specified period – this could be a few months or a year. With these costs in hand, create a realistic, projected forecast of all the sales incoming over the same period. By taking away the outgoing figures from the incoming, you’ll have a good idea of cash flow and what should be available at any one time.

This is just a starting point for cash flow forecasting. Unexpected shortfalls and windfalls can, and will, occur. But these simple steps are all that is needed to build good practice from the ground up.

If your business is looking for investment or other financial services, GIC Capital provides sound, quality advice. We work to ensure your business is a success, and work with you to ensure the future is secure.

The collapse of Carillion, a major British multinational facilities management and construction services company, has highlighted some major downfalls within the UK construction industry and has even led to a report being published by Constructing Excellence, revealing that 43% of construction firms prioritise immediate financial goals over organisational resilience.

So, what else have these reports revealed about the financial situation of construction firms and what steps can be taken to improve it in terms of building better financial models?

The findings

The reports revealed that senior business managers and executives within the construction industry highlighted a number of financial issues as being detrimental to their business goals, including inadequate budgets, insufficient senior management focus on resilience and a lack of skills or knowledge related to ensuring business continuity could be achieved.

At present, the construction industry is a major player within the UK economy, contributing £138bn in value added to the UK economy and employing 3.1 million people, which equates to 9% of the total UK workforce.

With the uncertainty of the UK economy still a present issue, what can leaders within the construction industry do to remain on top?

Embrace the benefits of new technology

Providing staff with new technology will ensure that the industry remains dynamic and will also help with boosting productivity and efficiency. For example, 3D BIM modelling can help with project planning and also material acquisition.

Listen to your staff’s needs when it comes to training

If you want to improve your company’s credentials, it’s important that you listen to the people that are working for you and adjust your training accordingly.

Manage your client’s expectations 

With large construction projects, it’s inevitable that there are going to be setbacks and areas of tasks that don’t go exactly according to plan. Because of this, it’s important that you set realistic timeframes and expectations with stakeholders before going ahead with a project.

Planning is everything

It might sound fairly obvious and rudimentary, but effective planning is crucial to businesses that are operating within the construction industry. A good place to start with planning improvements would be to look retrospectively at other projects that you have completed and consider what could have gone better in terms of planning.