Whether you're a sole trader, manage a small team or even have a few different teams in various locations, one thing remains the same about running a small business: it's hard!
From cash flow to investing and managing staff, running and growing your business is a rewarding task when done right.
So what do the successful, smooth-running businesses know that the strugglers don't?
Below are 10 top tips for managing your small business.
1. Plan for Success
It might sound obvious, but having a detailed and realistic business plan in place early is key.
The important point though is to refer back to them from time-to-time to make sure you're on track, or adjust them where necessary.
It's incredibly easy once you have taken the difficult step of setting up your business to just crack on with things, forgetting about the plan altogether.
But it's that plan that will give you clarity going forward and make it easy to manage your costs and growth plan.
This is one of the best ways for a small business to save money because, referring back to that plan, you might realise that actually, you're spending a lot more than you'd planned to on a certain area.
Plan, review and plan again. That's the best way to keep your costs under control.
2. Cut unnecessary costs
Leading on from that, aside from small costs creeping up, it can also be a great idea to cut some costs altogether.
It's well known that cost-savvy managers keep their eye on the little things that add up, rather than just the big things like rent and electricity.
Free croissants at the BBC were famously cut when Greg Dyke began a purge on unnecessary expenditure. The result? A saving £20 million!
It’s no wonder that closely examining expenditure is the first priority when trying to grow small businesses.
Tiny elements of the business such as the humble paper clip may not be missed at all, so removing them completely can save a surprising amount of cash without having an impact on the running of the business.
Do a few quick sums to see how much you're spending per year on the necessities and think about which ones you can cancel altogether.
3. Value not cost
It’s tempting to buy cheap when investing in technology for your business, but this is a common mistake made by business owners up and down the country.
We're not saying you should just buy the most expensive thing on the market - that would also be a mistake.
The key is to look not at the cost, but the value to your business.
How many hours per month will this piece of equipment save me?
How much can we charge our customers if we introduce this new service?
How many more customers will this new piece of equipment allow us to serve?
It's questions like these which you need answer instead of just "How much does it cost?"
Investing money wisely in the short-term can have a huge effect on your turnover and profitability in the long-term, so don't fall into the trap of thinking that you should buy cheap, or that you should buy the most expensive; think instead about the value to your business.
4. Don’t underestimate cash flow
A business can have great products/services and brilliant staff, but cash flow is still essential for survival and growth.
Inaccurate recording of all incoming and outgoing costs can cause cash flow oversight, so cash flow problems can seemingly appear from nowhere.
Banks are particularly keen to identify any cash flow issues when deciding whether or not to lend, as it can truly make or break a small business.
Work with an accountant to establish whether your business is at risk from cash flow problems or not.
5. Encourage quick payments
Improving cash flow can seem challenging, but for small businesses problems tend to come from poor payment discipline.
Establishing a good collection system and being firm with suppliers and customers who are difficult helps to identify and resolve disputes quickly.
Encouraging quick payment can range from offering discounts for early payers to requiring credit cheques on all new non-cash customers.
6. Think carefully about staff
It can be a horrible decision to make, but small enterprises often find that a big loss of money is unnecessary staff.
Think very carefully about the benefit and necessity of hiring new people, and the efficiency of current staff members.
It may be possible to avoid letting people go by investing in training and improving their productivity, or finding out if there are reasons why they’re not working to maximum efficiency.
7. Get creative with marketing
Many small business entrepreneurs get frustrated when trying to promote their business in an increasingly crowded market. The temptation to invest in an expensive marketing campaign can be strong.
However, there are certain things you can do for little-to-no cost that will seriously improve the way you market your business.
Social media, for example, means businesses can gain huge amounts of PR locally for virtually nothing.
Think of running competitions where you offer people the chance to win a free coffee, MOT or whatever it is you sell.
Small campaigns like this can be a great way to gain some free traction online.
8. Look after your customers
Lots of businesses put plenty of effort into winning new customers, while forgetting the ones that keep the business going.
The little old lady that spends a small amount with you every week is just as important than the one-off customer who spends a big sum after being attracted by a deal.
Maintaining excellent customer service and being seen as reliable and trustworthy is one of the best .
Customer loyalty and brand reputation will also help you recruit new customers without raising costs, and ensure that cash flow is consistent.
9. Go green
Once regarded as a luxury for companies looking to improve the way they do things, small businesses are now able to access green tech and energy deals that means sustainability is now a savvy business move.
Investing in solar panels, switching energy supplier or even reusing things rather than throwing them can help to save costs and even generate new profit.
10. Diversify your offering
Small businesses should always be on the lookout for new ways to market their product, or adapt their strategies to identify areas where they could grow.
Many business may not realise the cash they’re losing out on by excluding certain demographics or having cash tied up in products that don’t sell as well as predicted.
Money can be saved by only making small and gradual change and easing growth in a sustainable way.
Think about trends, freebies you can entice people in with and cross-sell opportunities to increase profits incrementally.
Thanks for reading. If you want your business to thrive and grow, continuous improvement is necessary to ensure you don’t get a nasty surprise during a slow period.
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