For a small business owner or entrepreneur, starting a business during recession or growing your business during tough times can be the ultimate challenge. With agility, planning and the right resources, small businesses may even spur growth even during tough times. There are many strategies for survival and growth in business; however, there are also common denominators that are characteristics in small business success during tough times, so here are a few strategies to consider.
Re-evaluate Your Business Budget
Cost management is a prime importance for business, which relies on credit, to grow and profit and more so in a small business enterprise, such that when tough times come, your well-planned and well-thought of budget management and implementation will be your most important tool factor to allow your business to survive during tough times and continue to grow. To be able to achieve a well-planned cost management system, you may have to provide an accurate system of profit and loss projections and, at the same time, make short and long term forecasts.
Practice Business Anticipation
Practice to anticipate or even expect some unforeseen circumstances that may seriously affect your small business, and having an emergency fund is proof of that kind of anticipation, such that when there is need to change some of your business operations to be able to continue with it, that emergency fund will be much needed to finance whatever changes will be instituted in your business. Having an emergency cash fund you can fall back on can make a huge difference in carrying out your business through hard times.
Keep always an eye of your cash flow and manage it well, since this is a vital factor to allow your business to succeed and survive. Through a well-monitored and well-managed cash flow, you can have an accurate analysis if your business needs additional capital requirements or your one-time investment was enough.
Have Updated Monthly Statements
One of the basic must-do in any business is to prepare and review the following monthly statements, which are: balance sheet, profit and loss statements, and cash flow statements. Any responsible business owner has the duty to regularly keep an accurate account of all the money entering and leaving the business, including the constant updating of your budget and monthly statements.
To improve your bill and collections processes, try automating your accounts receivables (AR) process, using the appropriate accounting software, and by doing so, you get these great advantages: 1. E-invoicing offers AR departments the freedom to produce both paper and electronic invoice format in order to match every customer preference, 2. Moving from manual to automated invoicing not only increases AR departments efficiency, it can also reduce processing costs by 44%, 3. An e-invoicing solution allows companies to send out invoices as they are prepared in real time, giving customers the chance to immediately initiate their internal payment process and getting you paid faster, and 4. Automatic emails to customers reminding them of their payment owed helps speed up collection times, reduce calls, and improve customer relations.