Staying out of the red is a major goal for business owners and operators but few actually strategize to maximize their earning potential. If you only stay ahead of the tide you will never plan for the coming storm or relaxing weather.
We recommend the following strategy for small business owners struggling to stay on track:
Look - Repair - Budget - Plan - Execute
Look - Perform a critical assessment of your financial situation
Check out the balances of your banking and credit accounts. Assess where you are investing vs where you are hemorrhaging funds. Over spending on space, utilities and product can be hard for many businesses to come to terms with. Often we find ourselves stuck in a vendor or client relationship where we are undervaluing our services and over paying for product. You can change the direction of your spending relationship as needed anytime.
No one likes being ghosted, that includes vendors and debt collectors. Find and repair relationships where you can. When I asked a collections agent for a small company,”What they hate most about their jobs?” I was told “The lack of communication”. If you at the very least communicate your situation, it will at least maintain your relationship with the representative OF the corresponding company. This will allow for some grace in keeping your company on decent terms with vendors.
Lay your business out bare and honestly look at what you need vs what you want. Do you really need that shiny new office chair? Creating a realistic budget is essential for business success.
Business planning is often overlooked in the day to day operation of your business. Set aside time each week to review your:
Finances - keeping an accurate set of books allows you to know the financial health of you company for a period in time.
Sales - knowing where you are succeeding vs where you are struggling allows you to analyze and adapt your sales strategy to suit the needs of your business.
Operations - period review and assessment enables your business to streamline processes and evolve to best suit your scope of work while allowing for input that will be useful in the growth of your business.
Adaptability is one of the things that sets Fortune 500 companies apart from their competitors. Being able to assess, strategize and implement changes to your business will keep you fresh and motivated to grow your enterprise.
Don't be afraid of the BIG RED LINE, as business owners, we all face hardship. Savages raise to the challenge.