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REIQ Journal : November 2008
12 FEATURE Peter Hallahan, Hallahan & Co. Chartered Accountants Question 4: Do you understand the cash flow issues in your business? Profit does not always mean that cash is available when you need it. As credit tightens, the requirement to understand and manage the pressures on your cash flow will be increasingly important. Prepare a cash flow budget to identify seasonal and extraordinary demands on cash. Apart from managing the cash flow from trading results, it is also important to understand the requirements for debt reduction, owners’ drawings, capital acquisitions and taxation payments. Make an appointment with your accountant to discuss these issues. Question 5: Do you understand and are you protecting the critical assets of your business? These assets may include staff, IT systems, supply chain and business name. Once again, put your efforts into the areas of most importance. Supporting your senior sales people may be a more effective use of your time than dealing with the administration assistant. Question 6: Do you understand and monitor your marketplace? It is important to be critical of the information coming to you about your business. Do not be unduly negative, but be considerate of all the facts. The market has slowed so try to be realistic about when it may return. Question 7: Do you understand your own capabilities to manage change? As you consider the strengths and weaknesses of your business, be aware of your own areas of interest and those areas you may be inclined to let go. Be prepared to bring in outside support if necessary. The old catch-cry about successful people surrounding themselves with good people is critical during challenging times. Be prepared to relinquish areas of management where somebody else is better able to take the position forward. In conclusion, now is the time to take stock and concentrate your efforts for the best benefit of your business. Regardless of market conditions, you need to be certain that your daily contribution to your business is as effective as it can be. The old catch- cry about successful people surrounding themselves with good people is critical during challenging times. REIQ Journal November 2008
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