If you are like millions of taxpayers trying to make a living running a small business, you know it is tough out there. Here are some money tips to help your business survive and thrive.
You need to know and understand your sales cycle. If you’re a business-to-consumer retailer that sells $20 items, your sales cycle is likely fast enough that having a cash buffer on hand is less of a concern. But if you’re a business-to-business company whose sales cycles last months, or even years, having extra capital in the bank can mean the difference between open for business and closed.
Understand your cash flow. One of the biggest causes of business failure is the lack of understanding cash flow. At the end of the day, you need enough money to pay your vendors and your employees. If you run a seasonal business, you understand this challenge. As we move into the last quarter of the year, many retail businesses use this time to make or break their year.
Keep track of sales and how customers find you. When looking at your business, there are a few big items and/or events that drive your business success. Do you know the key factors of your financial success or failure? By keeping track of day-to-day operations, seasonal staffing and trends, it helps in budgeting for 2017.
Manage your inventory. In the restaurant business – over buying can mean spoilage and lost profits. If your business sells a physical product, you need a good inventory management system. This “system” does not have to be complex; it just needs to help you keep control of your inventory. Unmanaged inventory can deplete your cash quickly. Sell off old inventory even if it is just above cost. At least you recoup your investment.
Do you know your customers? What is an ideal customer? Can you provide additional services or products? They already know you and are purchasing a product or service, ask them if there are things you can do better or differently. Will they recommend you to others?
How are you different than the competition? What makes people buy from you? Once you know who your customer is (your target audience), understand why they buy your product or service. Can you add value to your product or service?
Don’t go it alone! Successful small business owners know they cannot do it all themselves. Do you have a good group of support professionals helping you? With all the consultants in the market place, you can build your own virtual team. You will need accounting, tax, legal, insurance, marketing services and employment help along with your traditional suppliers.
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