Here are six ideas to help your business grow and thrive this summer.
- Understand your cash flow. One of the biggest causes of business failure is a lack of understanding of cash flow. If you run a seasonal business, you understand this challenge. The high season sales harvest must be ample enough to support you during the slow non-seasonal periods. At the end of the day, you need enough cash to pay your vendors and employees.
Recommendation: Create a 12-month rolling forecast of revenue and expenses to help understand your cash needs.
- Know your pressure points. When looking at your business, a few big items drive your business success. Do you know the top four drivers of your financial success or failure? By staying focused on the key drivers of your business, success will be easier to come by.
Recommendation: Look at last year’s tax return and identify the key financial drivers of your business. Do the same thing with your day-to-day operations and staffing.
- Inventory matters. You need a good inventory management system if your business sells physical products. This system doesn’t have to be complex; it just needs to help you keep control of your inventory. Cash turned into inventory that becomes stuck as inventory can create a significant cash flow problem.
Recommendation: Develop an inventory system with periodic counts to ensure you do not have shrink or theft issues, which can help identify when you need to take action to liquidate old inventory.
- Know your customers. Who are your current customers? Are there enough of them? Where can you get more of them? How loyal are they? Are they happy? Several large customers can drive your company’s growth or create tremendous risk should they take their business to a competitor.
Recommendation: Know who your target audience is and then cater your business toward them and what they are looking for in your offerings.
- Know your point of difference. What makes you different from other businesses selling a similar item? Once you know your target customer, understand why they buy your product or service.
Recommendation: If you don’t know what makes your business better than others, ask your key customers. They will tell you. Then take advantage of this information to generate new customers.
- Develop an excellent support team. Successful small business owners know they cannot do it all themselves. Do you have a good group of support professionals to help you? You need accounting, tax, legal, insurance, employment help, and traditional suppliers.
Recommendation: Conduct an annual review of your resources. Be prepared to review your suppliers and make improvements where necessary.
While libraries are filled with small business advisory books, sometimes focusing on a few basic ideas can help improve your business’s outlook. Please call if you wish to discuss your situation.