This month’s Ask An Expert with Whitsundays Chamber of Commerce and Industry asks: What is the one thing I need to know about financing my small business?
Chamber members responded:
Fiona Erquiaga of Smooth Sailing Financial Consulting says “You need a solid understanding of your business cashflows – your current position, historic financial performance, future plans, and cashflow forecasts – so to highlight your finance requirements and how they will be managed.”
“Also be mindful of your credit score. Ensure your accounts are always within limits, bills paid on time (including the ATO). This demonstrates to lenders that you are a reliable and low risk borrower,” said Fiona.
“Don’t be in a rush to obtain debt” says Gus Walsgott, of the North Queensland Small Business Financial Counselling Service.
“In an ideal world, your small business will be able to sustain itself through free cashflow. Use savings to start your business. As the business matures, cashflows should become more predictable so obtaining and servicing debt will become a more tenable proposition.”
“Once operating, if you are dipping into savings or obtaining short term loans, a serious review of your business is required. Ask yourself, what is the demand for your product or service and how can your businesses deliver at a price point that creates suitable profits? These points are critical for new and potential businesses,” says Gus.
Both Fiona and Gus urge business owners to always seek professional advice to get a solution tailored to your needs.
Fiona Erquiaga of Smooth Sailing Financial Consulting
Gus Walsgott, of the North Queensland Small Business Financial Counselling Service. Photos supplied
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