If you are the owner of a small or a mid-sized business, chances are that you might have been haunted by economic uncertainties and asked yourself the following questions. How do you survive when sales plummet and the future looks bleak? What can you do to survive through hard times?
There are several ways to cope with the challenging times and your journey back to the top begins by not giving up on your business. Each business carries its own unique risks and rewards and there is no right ‘playbook’ for an owner to follow but the following 10 tips can keep your small business afloat during hard times.
Tip 1: Look at the Big Picture
Look at the big picture in order to truly bring about a positive change. Review your company’s business model and re-evaluate its strengths and weaknesses keeping in mind the realistic factors that come into play.
Tip 2: Have the Right People On-board.
Make sure you have the right people on-board as payroll is often one of the major costs involved in a small business. There’s no time like now to clean up house and ensure that your money is being well spent on quality employees who are doing their jobs effectively. As you grow, make sure that your revenue / employee ratio continues to increase rather than decrease.
Tip 3: Eliminate Insufficiencies
Whether it is making sure that your equipment is functioning effectively or that your employees are trained adequately or that your that your payment processor is offering you the best solutions, it is important to understand the true size and scope of the various shortcomings that are holding your business back and prevent them from impacting your future sales.
Tip 4: Sweat the small stuff
When you own a small business, sweating the small stuff is as important as keeping an eye on the big a picture. Ensure that little things such as the public’s view of your signage, inadequate parking, lack of road/ traffic access or ineffective advertising are not putting a dent in your bottom line.
Tip 5: Get Your Business Online
Whether you are an online business or not, it’s important to take your business online and to keep in regular touch with your customers through e-mail newsletters etc and to pique their interest by offering deals, contests ad giveaways relevant to the season. Besides, online campaigns are easy to measure and track.
Tip 6: Advertise and Reinforce Customer Relationship
Take a counter-intuitive approach to advertising during slow season when it is less competitive and cheaper. Consumers don’t just shut off in slow seasons but get rather selective so it’s important to stand out in the crowd. Run campaigns that bring additional customers in the door. Conduct one-on-one meetings and request feedback to ensure complete customer satisfaction and renegotiate temporary rates during off season. Let your customers take positive notice by sending a ‘thank you shout out’ to all of your loyal supporters in your newsletter.
Tip 7: Don’t Sacrifice Quality
When seeking to improve margins, it is important to ensure that you don’t sacrifice quality. Sales will only drop further if customers are unsatisfied with the quality of your product or services. The key is to cut costs while retaining the quality that your business stand for.
Tip 8: Manage Your Bottom Line
Manage your numbers month-by-month to maintain profitability and positive cash flow. Identify expenses that are not operational critical and can be either completely eliminated, differed for a future date or cut back. Order supplies properly and ensure your supplies/ card processors are offering your best prices available in the market.
Tip 9: Maintain Easy Access to Cash
Perhaps the most important strategy is to maintain easy access to cash. You may choose to tap into your personal savings, liquidate your stock holdings or borrow from family members but it is always better to visit a bank and open a line of credit before you run out of personal funds.
Tip 10: Set up a High Risk Merchant Account
Banks may not always lend you the required working capital to ride out the tough times, due to the unstable economy or due to low credit scores, weak cash reserves, lack of collateral etc. So, it is often recommended that you set up a high risk merchant account for your business so you can benefit of a substantial sales increase and enjoy lower costs.
High risk merchant accounts give you unlimited payment processing and the ability to grow your business easily.
Moreover, your credit maybe challenged when starting the business but as your credit card and alternative payment acceptance grows above the initial monthly volume, you are adding to your business credit and many merchants often use their high risk merchant account business as a good reference when applying for other forms of credit.