Keep an Eye on the Big Picture
From time to time, take a step back and check your business plan to make sure that you are proceeding according to the plan. If your progress has slowed down, then identify the roadblocks and start removing them. Sometimes small problems have a tendency to grow larger if left unattended – so make a plan for tackling them immediately.
Meet with your employees every few weeks, or circulate a company newsletter to keep them informed of the position of your business in the market and any anticipated future problems.
You should also solicit their suggestions and ideas on solving problems or how to increase business. Take the best ideas and make a plan for implementing them.
Keep an Eye on Your Employees
Ultimately, your employees are people, too – and they will be more productive when they are motivated. Reward your best employees; and reward all employees for their efforts.
If you manage to secure a big deal or piece of business as a result of their hard work, then surprise them with a gift or other incentive. Keeping your employees happy will help you ensure that your small business runs smoothly – it will also help reduce employee turnover.
You will also save money that you would otherwise spend on recruiting and training new employees.
Keep an Eye on Your Finances
Your business finances are very critical during the first few years of operations. Since serious profits might not yet have started pouring in, you will have to maintain strict control over your finances.
Pay off any bank loan if you have the money – interest saved is income earned.
Start spending on luxuries only after all your loans and your insurance premiums are paid up. In case you or one of your loved ones fall sick, you should have an adequate insurance policy to cover medical costs, which can quickly drain your bank account – and possibly bankrupt your business.
Keep an Eye on Your Sales
You should know which products are in demand and which aren’t – if you don’t, you can’t possibly maximize your sales volume. You also have to keep a close eye on inventory – maintain it in such a way that you quickly rotate in-demand products.
Concentrate on selling items where profit margins are high; if margins are low on some items, then concentrate on increasing the volume through discount or incentive strategies.
Keep an Eye on Your Expenses
By all means, keep your expenses under control – the only way you can do this is to track them. That means every expense.
If you have items that you use regularly, don’t buy them all at once, but split your orders into weekly or monthly lots so that your payments are also split into smaller, more manageable amounts.
Use Innovative Ways to Maintain Positive Cash Flow
Use invoice factoring as a way to increase your cash flow if you have too many credit customers. This method, where a factoring company buys your credit invoices against a cash payment, is a good way of maintaining positive cash flow.
It will also free up money to help with sales, marketing and advertising expenses, which you can use to help increase your business.
Start Budgeting
If you have not done so already, come up with a budget now. Budgeting will help you in forecasting your business income and expenses. By comparing your budgeted figure with actual ones, you will be able to identify where your money is actually going, what areas need to be increased, and in what areas your spending should be decreased or eliminated altogether.
It isn’t easy to start a financially healthy, viable business – but if you follow the tips above, you’ll be one step ahead of the game.
