Did you know just about everywhere it is, small businesses are the lifeblood of the economy?
Over 99% of all business are categorized as small. With this chunk of the market, you’d think operating a small business would be easy to do. Not so if statistics are to be believed.
Most SMEs Fail
Most startups fail, and HBR says it’s not always the fault of the owner, but a combination of challenges. In other words, not all businesses fail for the same reason.
What’s evident is most startups start strong and then start struggling down the road.
Global events like GFC or a pandemic can crash even the most robust enterprises. For example, during the coronavirus pandemic, industries like hospitality and travel suffered huge losses as lockdowns and halts on travel stopped many businesses from trading.
When revenue does not come in as expected, it is easy to reach for a loan to keep it going.
Being a small business, you might even take on personal debt to keep your business running.
Before you know it, you might even be facing the possibility of having to file for bankruptcy – either Chapter 7 or Chapter 13 bankruptcy. It does not matter.
While there are marked differences between the two types, bankruptcy is bankruptcy, and you certainly don’t want to reach that point.
Putting a pandemic-like event aside, business owners need to always watch the spending and assess the return on investment.
Working smarter on spending less and getting better outcomes can differentiate between growing and ceasing to trade. Here are a few tips on how to watch the cash flow.
Get A Higher ROI
Spend less on traditional advertising, and look for low-cost alternatives.
Less Advertising, More Marketing
Advertising is an inherent part of running a thriving business – no matter what size.
The thing is, advertising can be costly, and traditional means of advertising can prove to be a huge money leak for a small business. As such, you will want to look for lower-cost alternatives such as public relations, inbound marketing, and even using SEO and content marketing techniques as opposed to buying AdWords, ad spaces in newspapers, and TV commercial spots.
Social Media posting
Use social media to engage and share news of your business and its offerings.
Commit to writing posts on your blog and sharing them on your social media profiles. Use your niche blog content to create email marketing campaigns.
One of the best ROIs is achieved with emails. Email marketing is still a winning strategy for pulling visitors to your website.
There may be tasks that can be handled by your employees, who are paid anyway, so you don’t want to outsource that.
Some tasks, however, may not need a full-time employee. For these types of tasks, it is better to find an independent contractor. Keep your full-time staff to a minimum, and you’ll save a huge chunk on salary, as well as benefits.
Examples of tasks you can outsource: copy-writing, data entry, and even accounting.
A small business owner should focus on the cash, right- Sure. But cash isn’t the end all be all. You can actually help your bottom-line by cutting back on expenses when you barter your services with another business. You won’t be getting cash for your service or product in this case, but you will not be spending cash for a service or product your receive as well.
For example, if you run a spa and revamp your website, you can offer barter services with a web designer/copywriter. The chances of this working are better if you approach an independent contractor or a small business.
In this day and age, every business needs some hardware and software. So instead of paying a premium for proprietary software like Microsoft Word and/or Microsoft Excel, why don’t you look at open-source software instead? For example, use Google Docs.
Learn to negotiate better with vendors
A good businessperson is a good negotiator, but there is always room for improvement. If you want to cut back on expenses, one excellent way is to negotiate more and better with your vendors – from office supplies to phone/Internet.
Your vendors are also running a business, and they would rather keep you as a steady customer than lose you because of their unwillingness to reach a compromise.
These are only a few things you can do to save on expenses and increase your bottom line in the long run. As long as you are willing to make some changes and consider things that may not be your first recourse, you increase your chances of making it even in these tough times.