7 Strategies of Highly Effective Business Financing Planning
LIVIVA Advisory Group focuses on assisting SMEs to maximize their cash flow and profit within a short period of time. In this turbulent market, SMEs face various types of challenges including dropping in sales, increase in operating cost, difficulty in collection and etc. We will work together with SMEs to overcome all these challenges by leveraging on “7 Strategies of Highly Effective Business Financing Planning”.
- Cash Flow Maximization
- In order to ensure your business to have a healthy cash flow status, you have to identify sufficient working capital for your business and be clear with whether your creditor payment period, debtor collection period and stock turnaround is on average compare to market. Furthermore, there must be a 4-6 months reserved funds in your company for contingency. Misused of existing funding and loan structure must be avoided.
- Effective Cost Management
- To manage operating costs effectively, you must be able to fully understand the details Financial Statement of your company especially gross profit margin, net profit margin and auditors’ opinion. Furthermore, you must also identify business surviving price and cost compare to your competitors in order to increase your competitiveness in the market.
- Business Credit Enhancement
- If there is any adverse remark or record on the company as a whole or director individually, SMEs will not be able to access to financing from Financial Institutions & Development Financial Institutions. Therefore, you have to maintain good records and great scoring all the time. Business credit pre-assessment must be conducted on a regular basic to enhance creditworthiness and reputation.
- Business Modernization and Globalization
- Align with the global and digital market trend, business must be able to leverage on technologies & machineries in order to reduce dependence on labour force. Modernization enables you to get ready for global market demands & competitors. SMEs are now able to globalize your business through online portal & virtual payment and connect your business to the global market by B2B, B2C or O2O.
- Leveraging on Governmental Schemes
- In order to reduce financing cost, SMEs must be able to leverage on existing governmental schemes, especially Funds for Small & Medium Enterprise offered by Bank Negara Malaysia and Working Capital Guarantee Schemes offered by Ministry of Finance. SMEs are advisable to leverage on tax incentives and pioneer status rather than tax evasion.
- Business Estate Ownership
- Why still renting your business/factory if you can own it? Owning a business premise can enhance your corporate identity and gain trust from your clients. Business can also avoid the risk of rental increment and chased by landlord meanwhile enjoy the potential property value growth.
- Multiply Property Value
- SMEs must leverage on latest Open Market Value of your current property as this can help to enhance your existing cash flow position and existing Shareholders Fund.