For business owners, running a successful business is often challenging enough, but succeeding in the current environment for many has become difficult.
There is good news!
Critical to success in tough times is perseverance and keeping to the basics.
“I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.” – John D. Rockefeller
Take some time over the upcoming holiday season to think about your business and ways to improve profit and cash flow. Here are 3 business tips:
1. Protect and Grow Revenue
Take steps to better understand your customers and strengthen the relationship. Meet regularly with high value customers and offer your support. An increased understanding of their situation should help you protect and potentially grow revenue. Consider the following:
- Invest in new innovative (low cost) sales strategies
- Increase (low cost) marketing activities
- Spend more time with customers and sales team
2. Reduce your Operating Costs
Be prepared to make some hard decisions.
Examine your cost structure to maintain profitability including the following:
- Reduce/eliminate non-core costs
- Restructure non-productive roles
- Consider outsourcing work
- Negotiate better terms with suppliers
- Transfer fixed costs to variable costs (if possible)
3. Collect your Cash
Collecting cash from your customers may become more difficult in tough times.
Actively monitor cash flow at all times and investigate ways to reduce your working capital, such as:
- Debtors Collection: Place tighter limits on the amount of credit you extend and manage exposure to large customers.
- Stock Control: Avoid holding too much stock; if necessary, order more frequently.
To minimise any potential risks, business owners should constantly review and assess their position. A review of your business plan and budget, combined with independent and objective financial advice, are positive steps that should make a difference.