Cash flow is the lifeblood of any business, but with sixty per cent of businesses failing within their first year*, Bibby Financial Services is urging all companies to take action to ensure their profitability and ongoing success.

As a specialist provider of cash flow solutions to small and medium-sized businesses, Bibby Financial Services understands the ‘profitability pitfalls’ which arise on a daily basis within both new and well-established firms.

David Robertson, chief executive of Bibby Financial Services, said: “Business owners and managers will regularly be faced with a multitude of everyday tasks that may result in them loosing track of their main focus which has to be generating new business and making money. Quite simply profitability equals success – if a firm does not generate sufficient revenue it will fail.”

In order to help business owners and managers stay focused on generating revenue and creating a profitable company, Bibby Financial Services has developed the following tips:

•    Review operating costs – minimise costs wherever possible. Look at where your business spends its money. Are there any areas that can be cut back without impacting on the quality of your product or service?

•    Profitable customers – a handful of your customers can be responsible for a large proportion of your profits. Identify these and aim to build long lasting relationships and new revenue streams with these important customers.

•    Diversify your product range – creating new product lines will not only expand your range, it will also assist in keeping existing customers satisfied and may also lead to attracting new customers along the way.

•    Know your worth – Are you charging enough for your products and services? Review your pricing structure to ensure you are keeping up with inflation and the broader market.

•    Research suppliers – review existing relationships with suppliers. Are you getting the most for your money? Shop around and change supplier if necessary.

•    Learn to negotiate – if you don’t ask you don’t get. Talk to your key suppliers and ask about early settlement and loyalty schemes that you may be able to benefit from.

•    Buy in bulk – consider buying raw materials and supplies in bulk at a cheaper price per unit.  This could lead to significant savings for the business.

•    Everyone loves an incentive – consider offering incentives to both staff and customers who exceed sales or new customer targets.

•    Work smarter – investigate whether marketing or promotional funds are being used to their full effect.  If you are not actively marketing your business, then steps should be taken to put this right – you must make it as easy as possible for new clients to discover your products or services

David Robertson added: “Running a business is an exciting, rewarding journey that many people aspire to experience. Having taken the plunge, it’s vital not to let your chance slip away. For those owners and managers who combine careful steps to ensure profitability and who have the determination to succeed stand to reap the benefits of building a successful business for years to come.”