No One-size Fits All: Know How Much Funding Your Business Needs

Nonetheless, theres light at the end of the tunnel but only if you get acquainted with the finances of your business.

Embarking on a smoother financial journey starts with effective cash flow planning. Cash flow is like the oxygen that keeps a business alive and running smoothly, Naidoo said.

Its the money circulating in and out of a business, from income and expenses to investments and back, ensuring a continuous and healthy financial cycle, she explained.

Meanwhile, a good working capital or business cycle is crucial to the smooth running of your business.

The working capital cycle, or business cycle, is the length of time from purchasing raw materials to receiving cash from the sale of finished goods, Naidoo said.

She noted that businesses may encounter challenges when they have to pay suppliers before generating enough cash from selling their goods.

A shorter business cycle is beneficial as it helps businesses free up cash faster for other needs, while a longer business cycle requires more working capital to sustain operations, as cash is tied for a prolonged period.

Apart from cash flow projections, pursuing the correct form of funding is also a challenge for most SMEs.

Naidoo recommended possible practices entrepreneurs can adopt to get their business bank account funding-ready:

• Ensure cash is deposited into your business account: Having all business transactions in one place makes it easier to keep track of accounting records, income tax and audit requirements. It also makes cash flow forecasting easier.
• Embrace convenient banking tools for receiving payments: Adopting digital methods ensures fast and secure transactions, without the risk of robberies, fraudulent cash transactions, and high cash handling fees.
• Ensure the correct governance processes are in place: Financial reporting is important, hence investing in a good bookkeeper will stand you in good stead. Funders typically require certain documentation to confirm the businesss performance.
• Manage existing debt products to avoid overburdening business finances.