Cape Town - The effective planning and prioritising of a budget is one of the most important elements of a business, and key to the future of a business’ financial well-being, says Kobus Engelbrecht, spokesman for the 2016 Entrepreneur of the Year competition sponsored by Sanlam and Business Partners Limited.
The recently released Global Entrepreneurship Monitor 2015/2016 Global Report states that a lack of profits or finance accounts for more than half of business discontinuances. In South Africa, more than one in four business exits are due to financial difficulties.
Read: Make a budget and stick to it - economists
Engelbrecht says that during challenging trading conditions, greater attention should be given to budget allocation.
“Although forecasting and developing a budget in a challenging economic climate can be difficult, it is necessary for the survival of a business.”
Engelbrecht offers entrepreneurs the following advice on how to stay on top of their finances:
* Stay in touch: Market information and research are key ingredients to maximise opportunities and minimise losses. Interact regularly with your clients, employees and suppliers and make a concerted effort to stay up to date with new developments.
* Buckle up: By doing a quick inventory check, a business owner can quickly refine excessive costs.
* Be realistic: Cash-flow needs to be closely managed and should not be rigid in theory to make the entrepreneur feel positive about the financial future of the business.
* Back to basics: One of the many reasons it is difficult to keep track of money spent is due to the cashless society that businesses operate in. While a good way to avoid unnecessary overspending is to make use of cash payments, this isn’t always realistic.
CAPE ARGUS