From starting and managing a business to difficulty in managing the business cash flow and getting the credit, there are many small businesses that are experiencing considerable financial stress that is causing severe effects on their practicability.
The financial stress and lack of funds is the main reason why almost 96% small businesses fail within their first few years of operation in the United States. As everyone knows that staying in business is quite difficult. As a small business owner, it is important for you to know the financial survival tips to cover any financial gap and lead your small business to growth.
Here we share some important tips for small businesses to develop their 2017 small business strategy;
How Can I Manage My Cash Flow?
Cash flow is a critical part of your business success and without it profits are almost pointless. In most small businesses, well managed cash flow may be even more important as compared to profitability. Therefore managing your small business cash flow is important for the success of your small business.
One frequent oversight that almost every small business owner can make is to forecast cash flow too optimistically. You need to consider all the possible drawbacks that can take place. You need to get yourself set for all sort of surprises that can take place such as late paying customers or employee quitting the job from your business. You need to in place a good cash flow model and develop strong strategies to deal with all the uncertainties.
Raise Money When You Don’t Need It
It is advised to raise money when you don’t actually need it. By doing so, you will have enough cash reserve when you need it. This will help you reduce some of your business financial problems and improve your business appearance.
Manage Payment Schedules
You need to stay on top of your profits and expenses. In conjunction with seeing how fast you can acquire the cash, consider how you can slow money going out. You need to find an optimal payment schedule without isolating your suppliers.
Be Flexible When Finding Solutions
It is expected that your small business will experience some sort of cash flow crisis; this is usually a component of an emerging and developing business. Don’t let cash flow crises to ruin your overall business. Start searching for some sort of resourceful solutions.
How Growing Too Quickly Is A Mistake?
This is the common mistake that almost every business owner often make. “Don’t grow too fast”. It can be difficult advice to follow because most business owners want everybody as a customer. Possibly you want to take that immense order from a new client, but the question here is, are you sure you can deliver on it? If you can’t deliver on that order, don’t overpromise or under-deliver. If you do so, you will definitely lose your customers.
Why Getting A Small Business Credit Card Is Important?
Don’t use your personal credit card to pay for your business related expenses; by doing so you are complicating the matters and additionally you are likely losing a lot of time doing expenses. Don’t waste your time; get your small business credit card to make things easier. If you are a small business owner, the small business credit cards can be of assistance. With credit cards, you can not only get a line of credit to fulfill your business related expenses, but you can earn rewards and points on your spending.
Credit Limit Boost
The business credit cards normally have somewhat higher credit limits as compared to personal credit cards that indicate you can boost your business’ purchasing power and make some investments without drawing your personal cash.
A business credit card can help you maintain the business books with online monthly and quarterly expense tracking. Many give you with yearly spending reports that you can download from your accounting software. Business credit cards also are expedient approach to make the taxes easier, saving you the trouble of combing through your receipts so one can separate personal and business expenses.
A business credit card is considerably less risky option as compared to a big amount from an alternative lender or bank. The credit will be available again when you pay it back; you’ll not need to place your valuable assets as security and you don’t really borrow the cash until you spend it.
If you have a business credit card then you have an extra source of working capital when you get through financially troubled times. Cash advances normally imply an increase in fees and interest, but, be careful about how frequently you use them.
How Pricing Your Service Or Product Right Can Increase Your Sales?
No matter what sort of product or service you put on the market; the price you charge your customers or clients will have an effect on your business success. To set pricing on your product or service, your customers need to understand that your offer gives them with more advantages than they’ll find somewhere else.
Here are some basic rules of pricing to follow:
- All prices should cover costs and profits.
- The easiest approach to lower prices is to lower costs.
- Evaluate the prices regularly to make sure that they mirror the cost dynamics, response to the competition, market demand and profit objectives.
- Prices should be established to guarantee sales.
Understand The Market
You have to know how much customers will pay, as well as how much your competitors charge for a specific product or service. After knowing that, you can decide whether to go with your competition or to beat them. Actually matching a price is risky, even though you need to make sure all direct costs will be covered.
Select The Best Pricing Practice
The cost plus pricing involves adding a markup percentage to costs that will fluctuate between products, businesses and sector. Value-based pricing is established by the amount of value your customers add to your product or service. Decide which approach is most appropriate in your products before making a calculation.
Set A Value-Based Price
You will need to understand your market well to place a value-based price. For instance, the cost to bring an electric shaver to market is probably $50. But you might be able to charge customers $75 if that is the real market value of that electric shaver.
Keep On Your Toes
The prices of your products or services can hardly ever be set for a long time; therefore you will need to shift your prices to carry on with the marketplace. Keep in check what is going on and stay in touch with your customers and get feedbacks frequently to make sure your prices remain optimal.