Business debt management

It’s important to understand the key drivers of performance to give your business the best chance of long-term success. 

Many of the problems affecting business performance fall into at least one of the following categories:

1. Cash
   The way a business manages cash in the short term is an essential part of ensuring long-term success. It’s important to operate tight cash management – stopping the unnecessary outflow of cash from the business and taking advantage of any available surplus. Where there are difficulties in matching the inflow and outflow of cash, identifying what can be retained in the business to give a convenient ‘breathing space’ should be considered. This will give time to assess the options available and, if required, to secure a long-term finance solution.
   
   
2. Profitability
   It's important to understand the profitability of your business so you can identify what's working well and what's not, and make informed decisions. Short-term cash problems will often be caused by underlying profitability issues in the medium to longer term. A particular part of the business may be under-performing, and in order to identify problem areas and make informed decisions, it’s important to understand profitability by business unit.
   
   
3. Management
   It’s generally accepted that management strength is key to running a successful business. There are various ways of assessing people or management, including motivation, leadership, commitment and communication.