Capital, revenue, cash flow….
We all hear the words chucked around on shark tank but for many small business
owners who are new to the game it’s hard to know exactly what they mean.
With more than 438,000 small businesses in Queensland, competition is high. You need to know your stuff if your business is going to survive!
Below we have listed some of the most common areas of small business that we find our clients need the most assistance with:
Anyone who has been involved with owning a business will be all too familiar with the saying ‘It’s easier to keep a current customer than it is to gain a new one’. And not only is it easier, it is also a lot cheaper. Think of it this way, there is a whole strategy that goes into gaining a new customer, from digital marketing to referral programs to free trials and more. However, retaining your customers is often as easy and building relationships with them.
A Bain & Company study revealed that 60-80% of customers do not go back to a business even though they described themselves as satisfied. This is due to a lack of connection. You may get the pest control company out to your house and he solves your cockroach problem first go, however, 12 months pass by and it’s time to get your house sprayed again but you can’t remember who did the fantastic job last time. So, what do you do? Jump on to trusty Google of course!
That great job you did doesn’t matter if you don’t stay in contact with your clients and MAKE them remember you. Small businesses are often successful over the rapport that they make with their customers. This is a great way to ensure your customer comes back to you, if they need something, you will be the first person who comes to mind.
Slow economic periods
Unfortunately, even if your business is thriving the economy can often slow down and have a massive impact on your business. Luckily there are precautions you can take to minimise the impact. Below are our top 3 tips for your business during slow economic periods:
1. Ask your customers for payment upfront – this will help with creating a positive cashflow in your business.
2. Look for new customers – This tip is better implemented early rather than later. Having a variety of customers will be a safeguard if the economy starts affecting some of your major clients.
3. Create a leads tracker – This will allow you keep in contact with potential customers. It is important to generate new leads not just in slow economic periods, but regularly to ensure the growth of your business.
If you are experiencing a slow economic period, don’t let it discourage you. Many businesses have been very successful in difficult economic times.
Technology is constantly developing; this can work in favor of your business. It is important to embrace new technologies to allow you to stay current in your industry. Technology can help your business in many ways, from marketing to reducing business costs and more.
With so many people relying on social media for recommendations on where they should eat, book accommodation, what clothes they should wear and more it is important that your business is present on these online platforms. If you are for example a small café owner, being present on Instagram is an easy and often free way to spread the work about your business.
Technology can also increase productivity and efficiency in the workplace and as a result save on your business costs. From saving money on face to face time with clients due to video conferencing, to using apps and software that make your business more efficient, new technologies are constantly being invented that will benefit your business.
Cash flow, Cash flow, CASH FLOW!!!
There is no question about it, there needs to be a continuous cash flow to keep your business healthy. So, how do you keep cash flowing when times get tough?
– Take action to encourage prompt payment from customers, give them due dates.
– Use cash flow management tools. Contact Power2 to get the best matched tool for your business.
It is important to remember that the outflow cash flow will never stop. There will always be expenses and money running out of your business. Your focus needs to be keeping cash coming into your business.
Engage an expert when needed
If you are sick you make an appointment to see the Doctor, if your car breaks down you call RACQ. Why? Because they are experts in their field, they have the required qualifications and experience to get the job done.
But in most small businesses many owners like to think that they are sales assistants, accountants, marketers, tradesman and the list goes on…. You will drive yourself crazy trying to be an expert in every career field. One of the most important rules we have learnt in business is that its okay to ask for help. At Power2 we are experts in business advice. Dan Hay looks after the affairs of business clients ranging from accounting and tax compliance through to finance applications, budgeting and business planning. If you are wanting to enquire about any of our small business services, give us a call on 07 3808 2868 and ask for Dan or click here to enquire.
Information provided is general advice only and does not take into account your personal objectives, financial situation or needs. Before acting on this information you should consider the appropriateness of the information having regard for your own circumstances, personal objectives, financial situation and needs. When deciding whether to acquire or continue to hold a financial product(s), you should first obtain and consider the Product Disclosure Statement(s), Information Statement(s) and/or other relevant product documentation relating to that product(s).
Financial Planning services provided as Authorised Representatives of Power 2 Financial Services Pty Ltd ABN 51 164 747 595 Australian Financial Services Licence No. 444078