Thursday, April 2, 2020

Best Ways Small Business Can Survive in Today’s Economy

Business Survival Tips

It could be a very difficult year for new and young businesses. High oil prices, the credit squeeze and the never ending recession could all combine to make the trading environment somewhat challenging. Here are some top tips to make you stand above the crowd and ensure that your business is well placed to grow and prosper during the year.

Have a plan
Most businesses think that a business plan is a document only used for the purpose of raising money or at the start of a new business. Nothing could be further from the truth. Top businesses always have a plan and constantly review it. You should consider your business plan akin to a route map to help you get to where you want to go. A good business plan will provide you with targets against which you can benchmark your business to try and ensure you stay on track. It will force you to think about your business, what it does and what makes it different from other similar businesses. It will enable you to think about how you are perceived from a customer’s point of view. Prepare a plan now and be conservative and prudent with your estimates. Review it on a monthly basis against actual figures and constantly update it.

Differentiate yourself
We live in a world of increasing sameness. Whenever a market place reaches that point, many businesses find that the only way they can differentiate themselves is by cutting prices – a deadly strategy. What is key is to differentiate yourself. This is not always an easy process, but if you start by trying to write down the unique selling points about your products or service this will be a good starting point. Differentiation can also be in terms of the delivery of the service, (such as solely online) or product (UPS and their unique tracking system when it was first introduced). The key thing is to identify something in what you do that is different to your competitors.

Know the numbers
Too many business owners have little or no idea as to the key numbers in their operation. These may not necessarily just be financial, although these are very important, but can include other quantitative measures such as conversion rates, numbers of enquiries or leads or website traffic statistics. Great businesses measure everything that moves and even things that don’t. Keeping good records and measuring critical Key Performance Indicators, (KPI’s) give you something to benchmark against.

Use your time well
Running your own business places enormous pressures on your time. For someone who was previously employed, they suddenly find themselves with an almost limitless list of tasks to perform in a finite time. Good time management is essential. There are many time management tools available to help you identify what tasks are urgent and important and therefore need to be carried out immediately. Contrast that with those tasks on your list that are non-urgent and not important, (but still may need to be done), and you can imagine a system whereby you can prioritise your actions. Some good time managers also create routines that they stick to. Try not to let the incessant pressure of emails and telephone calls disrupt your train of thought particularly when you are working on a specific piece of work. Try also not to do too many things at the same time. Even computers crash in those circumstances!

Get good people around you
Ask any successful business man how they made it and you will be sure to hear that having good people around them was critical. However, in these days of outsourcing, they don’t necessarily have to be on your payroll, but can be people who you work with who share your vision and who you trust. Wherever possible, delegate to relieve yourself of tasks that can be carried out by others and encourage them and empower and motivate everyone you work with. The results will astound you.

Streamline internal processes and systems
Try and ensure that your processes and systems are as streamlined as possible. Not only will they save you and your team time, but they will also be perceived by your customers and contacts as examples of your commitment to quality service. Identify bottlenecks and system breakdowns at an early stage and try and ensure that every aspect of your business runs like clockwork. One successful businessman I know spends all his time reviewing systems and processes and in his own words, when he is finished, he starts again.

Get online
If you haven’t already done so, it is critical that you ensure that you have an excellent online presence. Doing business online is now expected by customers, contacts and suppliers alike. Monetise your website and find ways to deliver products and services digitally.

Manage that cash
Whatever happens, cash will always be king. In times where money is tight and business may not be as abundant as it once was, conserving your cash resources is critical. Keep an eye on expenditure and watch credit control carefully.

Work "on" not "in" the business
This is difficult for a new business, but is essential if you really want to survive and prosper. Working “in” the business is tantamount to having a job. It would be as if you have simply transferred what you were doing for someone else to yourself for less money, because you are probably working many more hours. Working “on” the business dictates that you do not do what the business does, but drive it forward as a separate entity. The difference is subtle but critical. For more information, you must read Michael Gerber’s "The Emyth revisited".

Continually improve yourself
Even the greatest business leaders continue to read and learn. None of us know everything yet there is an abundance of information available to us at all times. Try and set aside some time, be it daily or weekly to learn new skills, read others opinions or even carry out research online. Whatever it is, your business will benefit by your investment in self-improvement.

Source: https://www.companiesmadesimple.com/top-ten-business-survival-tips.html

Ways Small Business Can Survive in Today’s Economy

With a little discipline, good organization, and planning, small businesses can safely survive an economic downturn. Here are a few suggestions on how to stay afloat:

1. Stay in touch with your cash flow. Focus on the areas where your cash is being held up, such as inventory, equipment purchases, and accounts receivable. By doing so, you will be in a position to improve your current cash flow and predict a future shortfall.

2. Consolidate or restructure your debts. Bring together debt from loans, credit cards, or any other lines of credit. Negotiate with creditors for a longer repayment period.

3. Look for ways to cut costs. You could, for example, cut down on old and obsolete inventory, and save on paper and postage through the direct deposit of payroll.

4. Streamline your billing system. You need to on top of your customer receivables. There are several accounting software programs on the market, such as QuickBooks, that can help you keep track of who has paid and automatically alert you when bills are overdue.

5. Tighten your credit policy. Set stricter terms and conditions for receiving credit. You could require a down payment at purchase, shorten the payment period, and only extend credit to select customers.

6. Use assertive debt collection techniques. Know when to make phone calls, send written requests for payment, and statements, and know when it is time to hand it over to a collection agency.

7. Put off any plans for expansion. It is better to stick to what you are already good at and just try to make it better.

8. Negotiate with your suppliers. You can try to barter down what you are paying your suppliers. If you have a long term relationship with any of your suppliers then you may be able to get better credit terms.

9. Outsource certain jobs or tasks. Business owners can take advantage of a growing pool of professional freelance workers for any job or project that will take away from the business. This is a cheaper option to hiring employees, and you can get some quality work.

10. Focus on customer satisfaction. Work on retaining the customer base that you have built up with follow-through, good customer service, and quality control.

11. Know your financing options. Know where to get money before you need it. Some financing options are based on future sales and have flexible repayments, such as invoice factoring or merchant/ business cash advances. Focus on building relationships with current lenders, and do not forget about any family or friends who may be able to help you out in a pinch.

Source: http://www.fastupfront.com/business-articles/11-ways-small-business-can-survive-in-todays-economy.html

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