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Save Your Business with These Tips
As the saying goes, you have to spend money to make money. But what if you are struggling just to keep your business running, and growing your business through investments is simply beyond the bounds of possibility? When it comes to small businesses, recognizing the biggest money drains can mean the difference between failing and flourishing.
These five practices will help you recover and maintain your company’s financial health.
1. Optimize Your Expenses
Does it make more sense to spend money on marketing, or a new accountant? Do you need a landline for your office? Question even the smallest business expenses, and if they are not providing a return on investment, cut them back, or eliminate them entirely. If you know how much money you are making, and how much money you are spending, you will be able to project a financial plan that will save you dollars that you can invest back into your business growth.
2. Recover Your Debts
Dealing with late payments is a tricky business. On one hand, they can cause a SME to go out of business, while on the other hand you can hardly resolve the issue without damaging the relationship with your client. The key factor here is quick action. As soon as a payment becomes overdue, give a phone call to the client to inquire about the cause of non-payment.
Persistence in chasing late payments works in most cases. However, if it doesn’t, consider hiring a debt collection agency. It is a less confrontational way than the alternative – a legal action. If you choose the latter approach to debt recovery, first notify your client in writing about your plan to take court action. If the statement of intent brings no results, prepare to go to court.
3. Make the Most of Your Space
Ask yourself if you could move to a smaller office. Can you consolidate some of departments of your business? Can you use your offices for multiple purposes? Depending on the nature of your business and the number of employees, you might be able to work out of your home. This also entails less bills to pay, which will drastically cut down your monthly costs.
4. Go Virtual
Virtual technology reduces business costs in many ways. From free software solutions that help you manage your business and eliminate the need for pricey experts, to cutting down on office supplies. Minimize travel expenses by organizing Skype meetings, manage company projects and enhance collaboration with the help of Basecamp (there is a 60-day free trial), share and store files electronically through Google Docs or DropBox, and save on printing supplies. Many apps now have smartphone and tablet versions, which makes business travels easier.
5. Prevent Employee Theft
Some researches show that over 80% of workers admit to stealing form their employers. Most often, they “borrow” an envelope, or a stapler, or print their children’s school papers at the office, but it can get as expensive as “borrowing” a laptop and forgetting to return it, or as serious as disclosing confidential information. Establish a clear theft policy and make sure your employees understand the consequences they will be facing if caught red-handed.
These small efforts can really add up and make a huge difference.
What tactics do you use to keep your business liquid?
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