The bad news in the SME market in 2016 was that 67% of small businesses that closed in South Africa did so for financial reasons.
This is a far more pressing problem for local entrepreneurs compared to their regional counterparts, with 50% more South African entrepreneurs discontinuing their businesses due to a lack of access to finance compared to the average for Africa. With this and the reality of SA having entered an economic downturn in June, it’s not hard to feel a bit bleak.
Darlene Menzies, CEO of Finfind, South Africa’s leading online access to finance solution, shares a few finance tips on optimizing your cash flow management to help ensure that your business survives and thrives during rocky times.
Ask for a deposit from your customers
One of the easiest ways of ensuring that you can cover the cost of doing the work for a customer is to ask them for a deposit before you start the work. This is common business practice so don’t be afraid to try it. It’s acceptable to ask for up to 50% of the total cost as a deposit with the balance being paid at agreed delivered milestones or on final completion of the work.
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