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GGP August 2015

38 I N S TA L L E R V I E W Unlock the potential of your business Simon Johnson, UK director of credit management at SIG, discusses some of the financial issues facing installers and fabricators today, and advises how they can be best protected and For installers of windows, doors and conservatories, business growth has its challenges. For any business to grow and flourish, it needs to be appropriately financed along the way. Of course, this is crucial at the outset of any company’s journey, but even when your business is up and running and operating successfully, you will need the assurance that future plans for growth can be financed. And let’s not forget the ups and downs that may unexpectedly come your way, when adequate financial support will provide that much needed support. So, whether you're a start-up or an established entity, let’s look at how you can unlock the potential of your business and best navigate your way to successful growth. Long term and short term finance As your business expands, it’s likely that further follow-on investment is required to enable it to move to its next stage. For instance, is there a large contract up for grabs that will stretch your current cashflow? Do you have the finance in place to purchase the additional stock required? Is the endless wait for customers to pay preventing you from investing in growth? Just imagine being able to get advances on cash due from customers, rather than waiting for them to pay. Being able to sell specific invoices as and when you choose, and obtain better cashflow when needed would be great. Better still, if you only pay for the money borrowed and for the period you need it, with no additional charges. It’s always wise to keep a cashflow reserve for outgoings such as staff wages and tax obligations, especially as these costs will increase as your business grows. Be prepared for the times when you may need to swiftly increase your overdraft to help you overcome a cash flow hump. Traditional banking finance in the form of loans isn’t always an option for smaller companies, as they might not be able to generate regular revenues to repay the debt. Asset financing: Looking to buy For any business to grow and flourish, it needs to be appropriately financed along the way new equipment or vehicles for your business so you can manage the expected increase in demand and keep up with the latest technology? Getting the best deal on any purchase is paramount and of course, you will want to spread payments over time, especially if your business is in the early stages of growth, as well as reducing as much risk as possible. Managing customer risk and cashflow: Wouldn’t it be great if you only ever acquired the most profitable customers whilst minimising risk? Ideally, you should obtain an instant risk analysis of customers to help you weed out bad payers, and use credit management tools to manage customer invoices owed. All of this will help you better manage and increase your cashflow. Reducing poor payments: Bad debt is a concern for any business. So, wouldn’t it be great if you could access a unique trade reference service that lets you share payment experiences of customers to gain confidence with good paying customers? It would also help you identify negative payment history and any legal proceedings on customers. Retention Monies Payment: Retention bonds are common in the construction industry and offer an alternative to cash retentions put in place by contractors to ensure that work is completed to their satisfaction. The main difference between the bond and the cash retention is that the specialist contractor receives full payment (less the cost of the bond), without retentions being deducted either during the contract period or defects period. Legal advice on contracts and disputes: Final account disputes can often lead to a prolonged period of cash flow difficulties. It pays therefore to have access to expert legal advice covering contract liabilities, dispute resolution and legal representation. Where to go and who to turn to is often the question for many companies looking for financial help and advice. Business Finance Tools As traditional methods of finance may not always be available or affordable, it’s not always easy to know who to approach for financial help and advice – especially for smaller installers. Thankfully, there are now independent financial brokers that specialise in the construction industry, who can give you the low down on the best products available, who to use, and how to secure the best rates. SIG has recently launched a new and unique financial package entitled ‘Business Finance Tools’. With a full understanding of the complexities of the construction and glazing industry, it offers a safe bet when it comes to financial assistance. Having carefully selected independent third parties to provide a range of financial services without profiting from commission, SIG genuinely has the industry’s best interests at heart. financed for future growth. www.ggpmag.com August 2015


GGP August 2015
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