Top 4 Financial Challenges Faced by Mid-sized Businesses and How to Overcome Them
- DJ Ventures
- Aug 8, 2023
- 1 min read
What are your major financial challenges as a business leader?
How do you overcome them?
The Top 4 Financial Challenges Faced by SMBs and how to overcome them:
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1. Cash flow management:
Maintaining a healthy cash flow is a constant concern for SMBs.
Delayed payments, uneven revenue cycles and unpredictable expenses can create cash flow gaps.
Streamline invoicing processes, negotiate favorable payment terms and regularly check cash flow.
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2. Access to capital:
Obtaining capital to fund expansion or to invest in new initiatives is often a struggle for SMBs.
Limited access to traditional financing and strict lending criteria make it difficult to secure funding.
Explore alternatives like strategic partnerships, factoring or crowdfunding.
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3. Financial Planning and Forecasting:
Planning and forecasting are vital for SMBs to make informed decisions.
Inadequate planning can lead to missed growth opportunities, overspending or ineffective resource allocation.
Gain a simple overview of your revenues and expenses and categorize them. Then project them in a suitable way.
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4. Talent Acquisition and Retention:
Building a competent finance team is a massive challenge for SMBs.
Knowing which skills to recruit is often already a big question mark.
At least one Accountant (who books the company's financial transactions) and one Financial Analyst (who knows how to derive insights from the first) are ideal.
They are not synonymous with each other and actually require different skill sets.