In an efficient business, proper bookkeeping is vital to maintaining an accurate record and snapshot of the current financial situation. Insufficient financial resources and poor cash flow threaten business survival. Nevertheless, remedies exist in many cases, ranging from efficiency savings and controlling costs to company restructuring through invoice financing (or factoring). Although the company may be asset rich (stocks, plant and equipment, perhaps the building), cash flow and liquidity dictate its success and very existence. With this in mind:
- Accounting and cash flow predictions should be checked monthly – even for small to medium sized enterprises (SMEs).
- Larger businesses require profit and loss statements, provisional balance sheets and a reasonably accurate forecast of cash flow each month.
- Start this regular reporting and prediction cycle around the middle of each month, so that reports are ready before month end.
- Consider and take the appropriate corrective action, making any necessary adjustments and changes if they are required.
- If financing is used, check that it is of the right type. Is it unnecessarily expensive? Can a better deal be had, perhaps from a well-explained approach to a friendly bank manager? Rescheduling debt and/or achieving lower interest rates will improve cash flow.
In the worst cases where no practical solution is viable, it may be necessary to consider the possible liquidation of the business and making a fresh start.
Take online casinos for example. What their founders found out, that their service, gambling, has demand all through the seasons, and even at times of crisis. So all they have to do is to market themselves correctly and they can stay in business.
Online casinos exist all over the world, and use all sorts of marketing techniques to keep them relevant and continue the flow of leads each day. They usually will have their own team of PPC campaign managers, SEO manager, email lists specialists and even affiliates helping them market their business. If you do not know what affiliate marketing is, is having people market your service and get paid when they deliver. Affiliate marketeers like using review website, where they review online casinos and score them. Players look for their advice will go to their site, read the comparisons and click to the casino of their choice. The link they clicked, is a specialized link that can be tracked to a specific affiliate.
Click here to see an example of a Finnish casino review site.
Especially for small businesses, competing in the modern marketplace requires determination, long hours and self-discipline. Dealing with obstacles is an important skill, as well as keeping customers happy and maintaining supplier relationships.
However: it is also important to avoid personal burnout by getting sufficient rest.
In a small organisation, over-dependence on the founder can lead to bottlenecks and confusion. This is sometimes rather disparagingly described as small company mentality. The best growth solution in the long term is through delegation – even if it may not seem easy. Careful team building helps, coupled with specific incentives that reward correct behaviour and results.
Clearly, employee morale and conduct have an effect on performance and the bottom line. Recruitment policy and rewards should aim to reflect this when pay scales and possible bonus schemes are drawn up, with links to annual employee appraisals or reviews.
A healthy and productive business environment has little or no place for competition and rivalries between internal departments, nor between individual members of staff. If this occurs, shrewd and astute management will require director support and perhaps a people specialist who can advise and help to make the necessary changes and adjustments.
Although metaphorically putting all one’s business eggs in one basket is not a good idea for any type of organisation, this is particularly the case for smaller companies and especially for partnerships and sole traders. Instead, try to make time to look at the big picture; it is best to avoid placing too much reliance on one customer or business segment.
If you notice that one customer accounts for more than around a tenth and definitely an eighth of gross turnover, the remedy is to look for new prospects to convert into customers and bring on stream, whilst still maintaining service levels and communication with the existing client base.
Occasional factors outside the organisation can present themselves, sometimes with surprising effects – for better or worse. From government action and budgetary policy to the evolution of markets and declining industries, businesses need to remain aware of local, national and (where applicable) international conditions that may affect their operations.
Aggressive competition from newcomers is also a possibility, which may have financial effects on longer established traders. Here, some points that may help are:
- examine profitability and control costs.
- Avoid losing sight of the situation – keep an eye on which the best (and worst) clients are – and note any trends.
- Monitor your market and investigate any changes.
- Remain open to new business opportunities to diversify and develop.
- look for niches in the market which no-one else has noticed or taken action on, yet.
- periodic SWOT analysis (strengths, weaknesses, opportunities and threats).
Is there a proper decision-making process? Poorly researched decisions surrounding new markets or projects can bring problems later or inferior performance. However, at the opposite extreme, paralysis by analysis leads to delays or inaction to avoid normal business risk and, therefore, loss of possible income.
The key to business success lies in finding the appropriate point between these extremes. The correct approach will differ between diverse markets, locations and companies – and even individual directors and staff.
The modern business world does not stand still; technology makes a big difference. This applies to all sizes of businesses, as many customers search online for services and products. Your online shop window needs to look good while the doorway should look inviting to encourage customers to come in and buy. All these factors contribute to success for the product or service, business image and turnover.
More than four out of ten potential customers already search on mobile devices such as tablets and smartphones. A website which is not optimized to make viewing easy on their portable hardware may be losing potential new and repeat customers as increasingly, customers shop online in this way.
Once inside the online store, customers are looking for a straightforward transaction that goes smoothly, without baffling error messages or with screens that load slowly and then are difficult to read on different browsers and devices. Conversely, a positive online experience converts prospects to new customers and bolsters customer retention, growing repeat business and referrals.
Points to check in this area are:
- A website which was state of the art the best part of a decade ago may still convey the information which the business management wants it to convey, but is it appealing to customers?
- Do visiting sales prospects relate to the USP? Although you may consider the content relevant, does it resonate with the target market?
- Are your pages viewable on a wide range of mobile devices?
- Ensure modern functionality, with social network sharing.
- Create efficient, flexible payment systems on transaction pages.
You can track all those issues for problems and errors using free Google tools such as; Google Analytics, Google Search Console and other tracking tools. Click here to read about the 7 leading tracking tools you can use.
Small and large businesses also need to make the most of technological advances such as analytics to discover campaign success, while mobile applications and cloud storage also help to maintain a business advantage.
There may be occasions when time is limited, especially in SMEs. A decision may have to be taken when a situation inevitably presents itself between the mutually opposing avenues of either business growth or maintaining quality.
Here, the decision (and its consequences) ultimately lies with the owners, director(s) or shareholders. Personal influences may enter into the equation; it is important to consider the long haul and keeping customers to provide repeat business income. Sacrificing quality may have a damaging effect.
Many reported IT projects exceed planned cost and timescale – and even when delivered late, do not perform as expected. To help get the best results, some approaches to consider are:
- Agree specifications, costs, timescales and penalty clauses.
- Monitor work progress and budgets – obtain regular progress reports and ask for periodic meetings (not too long!).
- Consider the services of a specialist project manager or team.
- Ensure proper testing before implementation and rollout.
Theft and fraud can lead to significant losses of stock, cash or equipment. Employ security measures to reduce pilfering by staff and shoplifting by customers, ranging from CCTV to intelligent payment systems with regular cash reconciliation.
In larger companies, insufficient checks and balances in financial systems are a weakness. Secure systems perhaps involving dual authorisation should be considered, as well as through periodic internal audits.
Traditional adverting may not be very productive and might not be current, as things can change in as little as a year. Therefore, it makes sound business sense to carry out market research on a regular basis.
It is almost impossible to evaluate the level of newspaper and televisions advertising success precisely. On the other hand, email and search engine marketing tools can monitor rates and click-through very accurately whilst also being reasonably priced. These newer marketing methods offer useful business insight and enable businesses to monitor their advertising ROI.
Repeat business and referrals are central to growth. Keep existing customers with offers, coupons, promotions and regular contact to encourage repeat sales; your business grows when customers have a reason to come back.
Avoid restrictive processes and policies, as well as excessive automation where clients cannot speak with a human. Weed out or train unskilled staff with a lack of service or problem resolution skills and empower them sufficiently to offer customers real help.
Good customer care maintains and builds a solid business base; this comes through giving the impression that the customer is always right – mainly through empathy and active listening.
Customer service specialists point out that regardless of how good a person is at what he or she does and regardless of the type of business, eventually a difficult customer is almost bound to come along. Although it is a natural feeling to want to try to avoid or escape the situation, it can nonetheless be turned into a great opportunity to win over a long-term customer if the situation is handled correctly. The advice offered by experts includes:
- Listen carefully to the customer and what he or she says.
- Apologize for the situation or problem if something has gone wrong, without apportioning blame.
- When replying, use words and sentences that show empathy – for example “I understand that must be disappointing,” or “I see the problem; I would feel the same way”.
- Ask relevant questions in a sympathetic but natural tone of voice – and pay attention to the answers the customer gives.
- Resolve the problem as efficiently and speedily as possible – or find someone who is able to.
It is equally important not to directly challenge an angry person who has a complaint, even if he or she is wrong. The aim is to solve the problem, not to get into a heated debate. Stay on topic, aiming to solve the problem in question without finding additional ones. Try to leave personal feelings to one side by remaining cool and courteous. Tact usually pays off in the long term.
Regulations, rules and local bylaws can give an impression of bureaucracy, but to avoid penalties it is important to comply. Particular attention is advised in the areas of:
- Local government or council regulations.
- Health and Safety regulations – these apply to the workplace, whether an office, shop, warehouse or industrial location and cover safety checks on electrical devices through to the correct use of protective equipment and workwear.
- Government legislation regarding wage policy.
- Timing of income tax and VAT returns to avoid penalties.
- Public liability insurance is essential, for legal fees and expenses if a visitor, customer or staff member is accidentally injured while on your premises.
- Liability insurance is necessary, to cover compensation claims in the event of negligence action brought against the business.