The whole world is going through a financial crisis. Businesses and individuals alike are finding it hard to stay in control of their finances. Small businesses, especially those who are still trying to establish themselves, are having the hardest time of all. Here are some tips on how to keep your business afloat in today’s tough economic climate.
Devise new strategies for old clients
If you have a solid repeat customer base, no matter how big or small, make use of it. Give regular customers more for their money, so that they spend more of it with you. You could offer an extra service or offer them loyalty points on purchases which can be redeemed in the form of a discount on future transactions. Many big retailers do this and it’s very popular with consumers.
If there are customers you have exceptional personal relationships with, you should leverage those relationships to gain referrals. You could develop any number of strategies to go about this, but the easiest way to do it, would be to simply ask. If your business has an online presence, ask loyal customers to write a review to be published on your website or social media pages. Most people will be more than happy to oblige.
Renegotiate old contracts
As mentioned earlier, everyone is feeling the crunch at the moment. Most people will thus understand if you approach them and ask that you relook contracts and agreements. Talk to your creditors; set up a meeting with your bank manager; even investigate the possibility of negotiating a new lease agreement if you’re renting the building your business is in.
No-one is going to give you the time of day, however, if you’re not prepared when you sit down with them. Do your homework and get all your paperwork in order before you make appointments. This brings us to our next point…
Stay on top of your finances
As a business owner, you have to keep track of the money coming in and going out every month. And if you’re trying to keep yourself in business, it’s obvious that the former of the two is exceptionally important. The easiest and best way to go about it would be to set up debit orders for all your clients (with their permission, of course). A debit order will ensure that the correct amount is paid into your bank account on a predetermined date, so that you don’t have to worry at the end of the month about getting paid on time – or at all. And spending less time on following up on payments means you have more time to work on other areas of your business.
Establish a cash reserve
This might seem impossible, but initiate and follow through on all of the action plans mentioned thus far and you will have more money available to you. Don’t be discouraged if it’s a small amount – you might have little to start off with, but invest it properly and that reserve will grow. If you want to add to it, explore ways in which you can cut your daily operational costs. Something as simple as limiting the printing of documents – so you’re spending less on paper – can make a big difference in the long run.
Terrence works as freelancer writer, so he thoroughly understands the struggles of today’s business owners. Personally, he found that making use of a debit order facility to collect money from clients made the biggest, most positive difference to his business. When Terrence isn’t writing, he likes to spend his free time on photography; his latest hobby.