Smart Strategies For Small Businesses To Create Stability This Year

When it comes to entering a new financial year as a small business, you want to make sure you are doing everything so you can successfully continue through to the next. It can be hard, especially with the current financial situation the world is in, to create financial stability but with the right tools and strategies, you will be able to do so much more than just break even at the end of the financial year. These smart strategies will give your small business the opportunity to grow and the competitive edge that you need to turn a profit and keep you running for years to come.

When it comes to starting a new business, it can come with a lot of lessons and stress. That is why any opportunity you are given to strategize and plan should be taken and to make things easier as you enter the new business year, we’ve put together some of our top tips to ensure that you are creating some stability this year.

What Do You Mean By Stability?

Every small business is met with costs from annual domain payments, staff wages and utility bills. This can pile up and take a big chunk out of what the business is bringing in. Whether you are a part of the supply chain or you sell through social commerce, there are still uncertain parts and risks that come with it. By implementing the correct strategies, you are, in turn, reducing those risks and creating an opportunity for stability during those uncertain times.

No matter how small or large your business is, there are risks and unexpected payments so you need to ensure you’ve got a backup plan. That’s why you’ve put together a checklist for you to filter through and make sure you are taking all the necessary precautions you can.

Smart Strategies My Small Business Should Consider

Budgeting & Forecasting

The best place to start is to reflect and get an in-depth understanding of everything that is coming into the business and everything that is going out. This can give you an idea of what you are making each month and all your expenses. This can help you clearly see in which areas you need to trim the fat so to speak.

If you aren’t going to break even or you’re hitting that mark, then there might be a little room for you to cut back, whether it’s by raising the prices or reducing the staff. It might be a hard decision but it is necessary during this time and also allows you to plan accordingly for the future. Sometimes taking a step back during certain periods can make the growing process smoother and more financially feasible.

It’s important that budgeting and forecasting analysis be a regular habit; what might be the right choice for January might need to be adjusted in July. This might be due to factors such as seasonality, performance, market conditions and any government regulation updates. Accurate and regular forecasting can help eliminate potential risks and give you the facts to make the right business decisions to maintain financial stability.

Expand Potential Revenue

To quote Love Island’s contents “Putting all of your eggs in one basket”  is a dangerous thing, especially for small and upcoming businesses. If you have ideas and the opportunity to stick your finger in different pies, then we would suggest that you do it. Where markets are volatile and consumer needs are consistently changing at a much quicker rate than ever before, you could try to capitalise on these trends and do your best to test different avenues.

This is not to say you need to completely distance yourself from your brand but more to think of complimentary products or services that could work well with the original concept. This will not only attract a wider audience base but also expand potential revenue. Better revenue is something every small business would like to see and is a main ingredient for creating financial stability.

Cash Flow Management Methods

Making sure your cash flow is not being met with any bumps in the road is essential. While this might be suitable for every small business type, it can be very useful for those who are in the B2B sector or with suppliers. Considering things such as credit insurance can protect your small business from not paying invoices on time.

Efficient cash flow strategies can create great stability within your business. Taking the necessary steps can make plans to grow achievable in the timeframe you have given yourself and remove all the time loss that comes with chasing suppliers and other businesses for money they are owed.

Begin by reviewing all the payment terms you have established with existing customers, invoicing processes and collection strategies that are suitable for your specific business needs.

Think About Cost Saving

Costs can spiral out of hand if the right budgeting and forecasting aren’t in place. Regular audits are essential to identify which areas need some attention without compromising areas such as the quality of the products and services. You can change who you work with and how you do business to prevent any unstable moments in the business year.

As a small business, saving money in certain areas is more important than ever and that’s why we’ve come up with some ways you can save to create some financial stability and lower those costs.

1. Review everything that is going out and consider whether it is essential to the business’s growth and success.
2. Renegotiate already established deals with suppliers and see if there is something better you can get for your loyalty. From electricity, stationary and product suppliers, there is always room for discussion as they want your business and there are other providers that would accept your money.
3. Sell what you don’t use; for example, if you are a small business that relies heavily on technology, then at some point you will need to update all your old stuff so you can try and get some money back.

There are many other ways for your business to save money without cutting corners. Finding what suits your small business’s requirements and niche might take some research and time but it will be worth it in the long run when it comes to maintaining stability.

Final Thoughts

When it comes to the new financial year, you should first strive for stability before you consider profits. If you take the necessary steps in the right direction of financial stability, you will not only survive in this incredibly competitive market, but you will also become extremely competitive. While this starts with a great product or service, you can only turn the idea into success if you have everything else to go with it.