Tips to Navigate Financial Challenges for Small Business Owners
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Small business owners have many challenges facing them. Not only do they have to keep a steady stream of potential clients coming in, but they also must maintain the clients they have.
Business owners also have several financial challenges, such as maintaining a positive cash flow, paying employees and vendors, and paying for overhead and supplies. Here are some tips to help business owners deal with financial challenges.
Do Research
When choosing supplies and services, you should do your research. If you pick the company you have seen or heard regularly because it is on top of your mind, you are more likely to spend more money. These companies that can advertise everywhere tend to charge more.
Find companies that are not as well known because you will get high-quality services for less money. Make sure you pick those that provide the high quality services you seek. Also, you should be researching supply companies. You can find companies that produce cheaper toner, paper, keyboards, laptops, etc., which will save money.
Use Discounts
Sign up for rewards and discounts even if you have to put your e-mail address on lists. These rewards pay in the long run. You can get discounts on things you buy regularly or things you buy once.
Credit card rewards programs can help you pay your bills. Over time, discounts and rewards will help you deal with financial challenges on buying things you need for your business.
Save Money
Putting away some of your revenues for emergencies is always a good idea. You should be saving a portion of the money every month. By the end of the year, that amount will have increased and give you a cushion if something should happen in your industry or your company.
Having a savings account is another way companies navigate financial challenges. Things that require immediate attention always surface in business. You have to be prepared and have money set aside when it comes at you.
Savings also allows you to take advantage of opportunities. For example, if you have the financial cushion of a savings account, you could stock up on toner cartridges or cleaning supplies, or ??? when they are on sale. You just never know when you might get a chance to save a few dollars.
Use Barter Services
You have a service to provide. Your colleague has a service you need. Bartering services is a way you can benefit both companies.
Say you need a new website, and the website developer needs marketing support. You can barter the marketing services in exchange for the website. This is a way both companies save money.
Bartering works on other services too. You can do it with the company directly or you can join a group, such as IMS Barter. These organizations allow you to create a profile. When you need a service, you can search the other profiles and find the company who will fit. When a company in the organization needs your service, it will contact you.
Barter organizations are great for brand awareness too because you get your company name and brand on another website.
Find Inexpensive Marketing Ideas
Some marketing costs a lot of money. Others are inexpensive but effective. Experts argue you should be spending 7 percent of your revenues on marketing, but if you are trying to navigate financial challenges, you might want to reduce that amount as much as you can. Examples include:
- Use social media sites for regular posting, but you might want to avoid running ads on those sites.
- Send an e-mail marketing campaign instead of mailing 100,000 pieces through the post office.
- Postcards are an inexpensive way to market your business that are effective.
- Send a press release yourself instead of hiring a marketing company to do it for you.
- Create a YouTube channel and post videos.
Get Lead Generation
To navigate the financial challenge of cash flow, you might want to get lead generation software. This is a platform that provides you with daily leads. You can follow up on these leads. The more potential clients you have, the more likely you are going to have steady income.
You shouldn’t be satisfied with the number of clients you have even if you are busy because clients leave for many reasons. Lead generation software allows you to keep replenishing your client base, which keeps your cash flow going strong.
Outsource HR
Human resources involve a lot of time and effort. The department goes beyond just paying employees. It has to keep up with yearly changes to federal laws, state laws, and county ordinances. Rather than navigate this financial challenge yourself, it is more economical to outsource HR functions to companies that specialize in it.
HR companies can create efficient ways to pay your employees and keep up with government regulations. If questions arise, the HR staff will have the answers faster than you would.
Use Contractors
Another way companies navigate financial challenges is to avoid having employees. They use independent contractors to do work. For example, most real estate companies will have all 1099-type agents instead of paying them a salary. This allows the parent company to avoid taxes, worker’s compensation and other fees set by states and municipalities.
When you use independent contractors, it is up to the contractors to pay the necessary taxes and get the right insurance. This work arrangement also benefits the contractors who are able to keep more of the money given to them. Many small business owners outsource regular work to independent contractors to navigate financial challenges.
Get Audits
As a small business owner, you want to have an audit done of your processes, systems and money management. These audits will tell you where you are spending too much money, where you can increase revenues and where you are not getting a return on your investment.
They also will show you ways to streamline processes and systems. They will point out ways you can outsource some functions. When implemented, audits will change how you do business and create a better financial climate for your company.
Reduce, Reuse and Recycle
This is not a mantra, but an effective way to navigate financial challenges. When you reuse items that can be used more than once, such as paper, you save money because you don’t have to replenish that item as quickly.
When you reduce your waste, you cut the fees you spend for trash pick up and landfill fees. You also run your workload more efficiently, which saves time and money.
You can reduce your energy consumption by turning off what isn’t used all the time and your water usage by keeping an eye on how much people are using.
These small steps will save money.
Some items can give you back money when you recycle them. They have to be in sufficient quantities to make it worth your while, such as copper, aluminum and bottles. If you generate enough quantities, you can recycle them and get paid for it. Look around your office space to determine what you can recycle. In addition, recycling generates a cleaner workspace, a better environment, a happier workforce and less waste.