It may sound like the ultimate challenge when you’re starting a business during a recession or growing a business during tough times, especially if you’re an entrepreneur or small business owner. 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.
The Need to Reassess the 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 do so, an accurate system for profit and loss projections must be established, as well as forecasting these projections on both short and long term periods.
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. The value of emergency fund will be an important fall back tool for your business to continue, especially if you have to necessitate some changes in your business.
Supervise Well on the Cash Flow
Monitoring cash flow regularly and managing it properly are important tasks of any business owner, since this can spell the difference if your business is well managed or not. Weighing if an additional capital requirement may be needed for your business, especially during hard times, will be difficult if your cash flow system is not properly managed and accurately accounted; therefore, it is equally important to monitor regularly your cash flow.
Prepare and Review 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. Signs that show how well you have managed your business can be seen in the accurate accounting of all the money entering and leaving your business and the constant updating of your budget and monthly statements.
Automate your accounts receivables (AR) process, using the appropriate accounting software, to improve your billing and collections process, and in that way you get these 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.