Archive for the ‘cash flow management’ Category

Every role that an entrepreneur needs to play requires proactive thinking. Do you have what it takes?

Every role that an entrepreneur needs to play requires proactive thinking. Do you have what it takes?

You’ve now launched your own business. A long-cherished dream has finally seen the light of day. Deep within you truly desire to succeed. You’ve read about what legendary entrepreneurs have and are doing to ensure that they are always at the top. You know that being an entrepreneur means you are responsible for making your vision of success a reality. You also understand that this responsibility will require you to play a number of roles. Well, here are some of the different hats you’ll have to wear.

You certainly don’t need to be good at all these roles to be a successful entrepreneur. What you aren’t good at – at the onset – can always be improved upon with time.

1. Head of new customer acquisition

You’ll need clients for your products/services. Unfortunately, they won’t start coming to your premises automatically; you’ll need to attract and then convince them to start spending their money on what you have to offer. At this point in time you already know who your ideal target customers are. You just need to find the best message that will strike a chord with them.

Reaching out to your target customers appropriately will bring them in droves...

Reaching out to your target customers appropriately will bring them in droves…

Marketing your business will be a continuous effort moving forward. You’ll always need to create relevance for your business in order to keep drawing in new clients.

2. Customer experience and service architect

Once customers have started trickling in, it’s upon you to ensure that all their interactions with your business are top-notch. Customers should be assured of satisfaction whatever their engagement with your business involves. This is what superb customer experience is all about – and it starts right from your mission statement which you always have to live up to.

Top entrepreneurs understand that keeping their customers satisfied is absolutely vital.

Top entrepreneurs understand that keeping their customers satisfied is absolutely vital.

Your customer experience strategy will need to be complemented by exemplary customer service which involves all the things a business needs to do to make a customer feel valued and important.

3. Chief salesman

Making sales is the only way your business is going to earn revenue. Ideally, the healthier your sales volumes, the higher your revenues and profits will be. Ensuring that your product/service gets out there and convincing people to spend money on it is an art that you must perfect. Even if you have a sales team it is clear that they will look up to you for inspiration and direction. Simply put, if you lack passion for your product/service don’t expect the sales team to work miracles on the ground.

Self-explanatory.

Self-explanatory.

Selling is an aspect of business where your input on the front lines is really required Steve Jobs-style. Interactions with your customers will reveal many pointers and ideas that you can take advantage of in order to make your sales effort more precise and focused.

4. Minding the business’ coffers

It’s quite ironic that for many entrepreneurs the sight of a healthy bottom line is what causes them to grin widest yet they are stubbornly hesitant to learn about how to prepare balance sheets, profit and loss statements and cash flow statements. While finding and paying fine accountants and bookkeepers to handle these matters on your behalf is undeniably convenient, the truth of the matter is that entrepreneurs who are personally involved in their business’ financial matters are best placed to lead their ventures to long-term success.

Successful entrepreneurs are involved with the money right from the get go...

Successful entrepreneurs are involved with the money right from the get go…

Being in charge of the financials will enable you to among other things know your business’ health, be sure of its tax compliance, and be able to monitor trends such that you can plan ahead based on facts rather than assumptions.

5. Undisputed team leader

As the business owner you also have the distinction of being employee #1. This means that even if your business does not hire other people you’ll be responsible for leading yourself. Being team leader means that you’ll have to espouse all the qualities of an efficient team and lead from the front.

There can be no other way for entrepreneurs to lead - it must be from the front

There can be no other way for entrepreneurs to lead – it must be from the front

Running a business successfully is no walk in the park – it requires dedication, commitment, zeal and focus from everyone involved. The team will eagerly play ball if they see you doing your part with vim and then some.

6. Head visionary and strategist

How big do you wish to grow your business? Does your vision portend success? To achieve mega growth you will need to have a solid strategy for the future. Indeed the most successful entrepreneurs have all grown from the ground up because one eye is firmly fixed on the big picture.

Successful entrepreneurs look at the big picture and strategize on how to get there...

Successful entrepreneurs look at the big picture and strategize on how to get there…

As such, even as you are engaged in the day to day running of your nascent business’ operations, you should ensure that all the present effort is essentially about preparing the groundwork for future growth and success. Long-term vision is imperative.

7. Head of creativity and innovation

Unless you are dealing with something quite unique that virtually nobody else can offer e.g. corks then constantly wearing your thinking cap is not an option. Why? You need to ensure that your business will always remain relevant and competitive.

New and relevant ideas will be key for your business'success...

New and relevant ideas will be key for your business’success…

Businesses often reinvent themselves after their previous brilliant offerings become obsolete. Reinvention is about progressively providing new offerings that can satisfy the needs of your customers. Reinventing is actually an investment of time, money and brain cells. Done well, you’ll certainly reap handsomely moving forward.

8. Chief perceiver of opportunity

Your ability to utilize the entrepreneurial qualities of foresight, instinct and alertness will definitely contribute to your business success. Given the dynamic nature of societal trends, new opportunities and possibilities are constantly being revealed. Only the entrepreneurial eye can identify these opportunities and only the entrepreneurial mind can come up with a blueprint of how to harness them profitably.

As an entrepreneur you need the ability to sense opportunity...

As an entrepreneur you need the ability to sense opportunity…

You therefore always need to keep an eye on trends. Specifically, you need to be aware of changing needs and requirements with the aim of providing innovative solutions.

9. Informed risk-taker

This role is ideally connected to that on opportunity perception described in the previous point. Entrepreneurial risk-taking describes the willingness to perform the actions required to harness an identified business opportunity knowing full well that the actions could result in profit or loss.

...as well as the skill and capacity to make a profitable swoop

…as well as the skill and capacity to make a profitable swoop

As such, considering the unknowable nature of the result you expect, your actions in this regard will need to be based on informed assumptions. It is for this reason that many successful entrepreneurs have on several occasions invested time and money in seemingly profitable opportunities only to have their fingers burnt. On most occasions though, these entrepreneurs’ achievements can justly be described as legendary.

10. Motivation guru

The rigors of running a business are such that you’ll always need steady hands to steer the vessel forward towards success. Even so, the exertion will regularly take a toll on you and the team hence the need for everyone to enjoy some down time for purposes of re-energizing.

Every team member needs to feel fully appreciated and involved in order to be optimally productive

Every team member needs to feel fully appreciated and involved in order to be optimally productive

Keeping the team well motivated is essential and there are many ways to do this besides paying competitive salaries. You can start by making the workplace atmosphere and culture truly conducive to productivity. It is also vital to make the team part of your vision; you can really use some of the bright ideas and suggestions your team can offer. Rewarding effort and goal achievement is also imperative.

Online transactions and online banking are the mainstays of modern business

Online transactions and online banking are the mainstays of modern business

In the last couple of years a steadily growing preference for online banking has been witnessed. An ever-growing segment of small business owners and indeed the general population now seldom has to visit local brick-and-mortar branches to do its banking.

Thanks to advances in technology, banking has become increasingly accessible. Tools like apps, direct deposit, online account management and ATMs have been instrumental in helping to make the banking experience more convenient, flexible, cheaper and less complicated.

Nevertheless, not all banks with online presences are worth doing business with. Again, there’s a lot more to think about than no-fee services and how high the annual percentage (APY) yield offered is.

What therefore should you consider when selecting an online bank?

1. Credibility

Make no assumptions; be sure your bank of choice is legitimate. Genuine banks have secure websites and are insured by the FDIC.

2. Banking limits

You need to find out what the caps for withdrawals and deposits are and whether or not these will work for the types of amounts you routinely transact.

What, for example, is the mobile deposit cap at the bank you are considering? Will this figure suffice for the check amounts you regularly need to deposit? If not, you’ll probably be better off finding another bank.

3. Cutting-edge security

While losing money is quite impossible thanks to the backing that organizations like the FDIC provide for online banks, the real concern has to do with data compromises. You must therefore opt for a bank that has put effective measures in place to forestall the threat of personal information exposure and sharing.

Find out how well your personal and banking information is protected...

Find out how well your personal and banking information is protected…

Such an online bank’s website will typically be protected by multiple safeguards and firewalls, coupled with fraud alerts and intrusion-detection monitoring. You also want to find out the Secure Socket Protocol (SSL) you’ll be using to access your account. Industry standard 256-bit SSL encryption guarantees highly secure transmissions with regards to personal data and online transactions.

4. Account set-up

You probably assume that opening an online account is easy everywhere.

It isn’t.

Many customers have in their reviews about online banks expressed how difficult it was to get going at their respective banks. Absurd requirements and copious documentation are the typical tell-tale signs of such banks.

In such a case simply find another bank where all that’s required is your personal information, and checking and routing numbers of an existent bank account.

5. ATM network

There should be enough ATM facilities in your vicinity

There should be enough ATM facilities in your vicinity

If you regularly need to withdraw cash make a point of choosing a bank that has a lot of ATMs in your vicinity, not too far off. It is also a good idea to scour the market for banks that refund all ATM fees monthly.

6. Fees and payments

Conventional banking is characterized by an assortment of payments including ATM, service, overdraft and monthly fees, and the amounts can be quite considerable. Online banks, on the other hand, generally tend to keep fees at a minimum for chargeable services.

A look at the fine print will let you know what you can expect to pay for monthly maintenance, low balance penalty, check writing, transfers to outside banks, customer service calls, etc.

7. Customer support

It is important to know to what lengths your online bank will go to make your banking experience convenient. Some of the pointers to check out for here include 24/7 telephone customer service, live chats, online bill payments, online calculators, real-time customizable account alerts, and a checking account product.

Effective customer care makes online banking so much more convenient...

Effective customer care makes online banking so much more convenient…

Find out what to expect at your bank from comments people have made on social media and from websites such as Consumerist. The FDIC website’s Bank Find feature will provide you with specific information about the bank you have in mind.

8. BauerFinancial ratings

You ideally want an online bank that has a rating of three and above on the Bauer scale. BauerFinancial has for 32 years independently analyzed US banks and credit unions performance. From these ratings you can make a comparison of how well or poorly a certain bank is performing in relation to the others.

There's a lot to think about before starting a business. Success will require entrepreneurial prudence.

There’s a lot to think about before starting a business. Success will require entrepreneurial prudence.

In the planning and starting-up of a business enterprise a novice entrepreneur will certainly have to contend with multiple tasks and problems.

With respect to these realities it is worth appreciating the usefulness of having a checklist in helping the individual to cover most, if not all, of the variables that are involved in starting a business. With such a checklist you will be able to address two main concerns i.e.

  • Evaluating your preparedness in terms of starting the planned venture and
  • Ensuring that you get off to a great start once you launch the business

The following are some of the most crucial questions that you must find answers to as a prospective entrepreneur:

1. How is your reaction to business opportunities like?

Successful entrepreneurs are known to react quickly to seize business opportunities whenever they arise. These reactions require a good measure of instinct since pursuing such opportunities does entail some form of risk-taking.

Like successful hunters, successful entrepreneurs make the most of opportunity...

Like successful hunters, successful entrepreneurs make the most of opportunity…

Poor business people, on the other hand, are known for their procrastination which results in missed opportunities and general poor business performance.

In this regard, would you describe yourself as proactive or reactive?

2. How good is your management of energy and time?

The old adage “Time is money” holds true for any entrepreneurship activity. Ideally, you should be one who is willing to commit energy and time to activities that will profit your business venture.

Building your business successfully will require lots of time and effort - it's going to be hard work...

Building your business successfully will require lots of time and effort – it’s going to be hard work…

The start-up stage is extremely crucial. Creating a successful business from the ground up will require 101% of your involvement, no compromise.

Are you ready for self-sacrifice?

3. How prepared are you in terms of saving money, making business contacts, and learning / training about your prospective business engagement?

Most of the successful entrepreneurs we know are people who had taken time to get prepared financially, mentally, and emotionally, for the task ahead. Prior to starting a business you must fully understand what the decision implies – it is a process that will require you to be wholly committed to the cause.

Start from the bottom and build upwards with the work-ethic of termites...

Entrepreneurs start from the bottom and build upwards with the work-ethic of termites…

Think about how termites build their nests. Individual grains of earth are gradually pieced together and the result is an imposing structure so rigid and strong. Likewise, you will need to prepare a solid foundation upon which to grow.

4. How well or how badly do you take discouragement or failure?

Successful entrepreneurs are those who have thoroughly understood that both discouragement and failures are realities in the business world. They are however pragmatic and work hard to make their business ventures successful. While being persistent in their efforts they also don’t over commit themselves and their resources to an extent that initial failures will ground them for good.

You might be tempted to quit - but this shouldn't be an option for you...

You might be tempted to quit – but this shouldn’t be an option for you…

Are you ready to be persistent or will you quit as soon as things start going wrong? What will you do if customers don’t show up as anticipated?

5. Do you have a competent adviser or team of advisers?

Prudent entrepreneurs seek the advice of seasoned business people in different lines of enterprise. They do so in order to have their ideas vetted before they embark on them. Doing so has spared many novice entrepreneurs undue financial and psychological hurt.

Having a good advice and support team is definitely vital in the early stages...

Having a good advice and support team is definitely vital in the early stages…

There’s no substitute for experience, and a problem shared is a problem solved.

Do you have a group of persons that you can consult with moving forward?

6. Have you established that the demand for your products and services actually exists?

This holds more so for innovative ideas. Talking to people about the idea may give some form of encouragement but the crucial consideration is ideally whether the intended product or service will actually be bought and become profitable.

Eureka! But is there market demand for your product?

Eureka! But is there market demand for your product?

Have you studied the marketplace and confirmed that there’s indeed a demand for what you plan to start selling? What similar solutions already exist? How does your solution stand out from the rest?

7. Have you established the financial implications required in starting up?

It is important to have a clear picture of what your business’ start-up costs are. Additionally, you’ll need to factor in money estimates that will help the business run well for at least six months after its inception.

Starting, running and sustaining your business will need money...

Starting, running and sustaining your business will need money…

8. Do you have enough to go on for at least a year?

Apart from the start-up and operating costs highlighted in point 7 above you must have a sufficient income or savings to maintain your upkeep for at least a year. This is so whether or not you have a family to support. These monies should be sufficient until a point where the business venture starts earning you a good income.

9. Do you have any external sources of funding in mind?

Sometimes it so happens that individual savings are exhausted before a business takes off. It is therefore prudent that you have reliable sources of potential financing backup in case such a scenario arises. How well prepared are you for such an eventuality?

10. What form of business organization do you have in mind?

There are quite a number of business forms that you can create including a sole proprietorship or a partnership.

Will yours be a sole-proprietorship where everything depends on you?

Will yours be a sole-proprietorship where everything depends on you?

All these forms have different implications and you are well advised to clearly understand these before you settle for any. A lawyer’s advice may come in handy here.

11. How do you plan to maintain your records?

Successful entrepreneurs have an efficient system of knowing what their incomes and expenses are, and how much their businesses owe or are owed. Such a system need not be complicated in design – it just has to serve the purpose.

Proper record-keeping will ensure that information about your business is always readily accessible...

Proper record-keeping will ensure that information about your business is always readily accessible…

Record keeping is an integral part of any successful business. Effective accounting will only become possible if there are accurate records to start with.

Is the record-keeping system you have in mind going to be appropriate for your type of business?

12. Will the venture need personnel?

Entrepreneurs whose businesses have to hire personnel understand the importance of having a skilled team. Prior to establishing your business you must first ascertain that the kind of people you need exist and that you can afford to pay them.

What type and number of employees will your business require?

What type and number of employees will your business require?

Where will you find the sort of personnel you require? Will you need full-time employees or will freelancers be appropriate?

13. How will your pricing be organized?

It needs to be clear from the onset that a correct pricing of your products and services is of the essence. Basically, successful entrepreneurs set prices that will help them cover all their production expenses as well as earn them a viable profit.

Product price has to reflect the production costs incurred and the expected profit margin

Product price has to reflect the production costs incurred and the expected profit margin

What considerations have you weighed in arriving at your proposed price? Will the revenues you’ll earn as a result of selling at this price be adequate to sustain the business?

14. How soon can the initial investment be recouped?

One aspect of successful businesses is such that they are able to recover their costs of investment in a reasonable time-frame. Such costs include items like machines and equipment, any construction and design work, etc., and they are recovered from the profits the business earns.

From your own estimations, how soon do you think this will take?

15. Does your business satisfy the legal requirements?

Successful entrepreneurs make a thorough background research into all legal aspects that are required for their ventures to operate within the law. You should therefore identify all the permits and licenses that you should secure before starting off.

Eventually, running an unlawful or illegal business is not worth the entrepreneurial effort...

Eventually, running an unlawful or illegal business is not worth the entrepreneurial effort…

Will you be operating within the law when you open your doors for business?

This checklist is neither conclusive nor does it suffice for every type of business. It however offers a general idea of what prospective entrepreneurs must bear in mind if they intend to be successful at the nascent stage of their business ventures.

Counterfeiters are so good nowadays, it's almost impossible to distinguish between originals and imitations...

Counterfeiters are so good nowadays, it’s almost impossible to distinguish between originals and imitations…

Counterfeit goods are also known as imitations. They are products that are manufactured and sold under another company’s name and without permission from that company. Today, the counterfeiting problem affects virtually every industry. Commonly counterfeited goods include car parts, electronics, personal care products, handbags and wallets, computers, shoes, jewelry and clothes. There are even imitations for medication.

Counterfeiting is big business around the world. It is estimated that $700 billion worth of fake merchandise is produced every year. Losses incurred in the U.S. as a result of counterfeit trading are estimated at $1 trillion annually and in excess of 75000 jobs. The Organization for Economic Co-operation and Development (OECD) has estimated that counterfeit trading may cost the global economy as much as $250 billion every year.

Closely associated with counterfeiting are two similarly despicable practices – tampering and diversion. Tampering involves altering of product ingredients. The consequences can be lethal. In 1990, for instance, 89 children in Haiti died after ingesting pharmaceuticals laced with antifreeze.  Diversion, on the other hand, involves the selling of a manufacturer’s product via an unauthorized seller or channel.

What risks does counterfeit trading pose for your business?

Well, in addition to lost revenues, counterfeits can potentially ruin your business’ reputation and erode its goodwill.

So, what are the various techniques that you can employ to fight the counterfeiting menace?

1. Registering your trademarks

Federal trademark registration is a vital aspect of brand protection. Doing this will enable you to enforce your trademark anywhere around the country. You will also get access to federal courts. You should also ensure that your trademark is registered in all countries where you do business. Foreign registration can assist in stopping the exportation of counterfeits that bear your trademarks.

Registering your intellectual property will help you to enforce anti-counterfeiting measures legally

Registering your intellectual property will help you to enforce anti-counterfeiting measures legally

2. Registering your trademarks with customs agencies

Your trademarks should also be registered with customs agencies, both locally and in countries where you do business. The U.S. Department of Customs and Border Protection (CBP) runs the Intellectual Property Rights (IPR) Enforcement program tasked with preventing the inflow of counterfeit merchandise into the country. Based on the information you have provided, the CBP will be able to curb the trade of counterfeits as it carries out its shipment monitoring mandate.

3. Investigating the market

As a proactive business owner you should regularly monitor the market to ascertain that what is being sold as your merchandise is actually genuine. Regardless of where you sell your products, online or through brick-and-mortar retailers, three factors should be able to inform your curiosity: price, packaging, and location.

You should regularly scour the market to see if imitations of your brands are being sold

You should regularly scour the market to see if imitations of your brands are being sold

Don’t hesitate to take immediate enforcement action in the event that counterfeit goods are found. Pursuing civil litigation will send out a strong deterring message to other potential sellers of counterfeits.

The following are some of the legal measures and settlements you (the plaintiff) can demand of a person (the defendant) caught selling imitations bearing your trademark:

  • Monetary compensation
  • A recall of the counterfeits sold
  • Ongoing audits of the defendant’s inventory and records
  • A permanent injunction preventing the defendant from importing and selling imitations

To practically distinguish your products from counterfeiters’ merchandise you can employ the following technological defenses:

4. Placing brand-specific patterns on clothing

The use of a partially invisible thread to produce brand-specific patterns on fabrics can help clothing manufacturers to identify and nab counterfeits. The thread used for this purpose is produced cheaply but is not easily reproduced. The customized patterns made with the thread are only visible under special lighting.

5. Using iridescent security images

Courtesy of Nanotech Security it is now possible to emboss a security image of your choice on your merchandise. This image can be applied on a variety of surfaces, ranging from metals to fabrics. This anti-counterfeiting measure will set you back a few pennies per unit. For counterfeiters, however, replicating your security image will be quite impossible.

6. Adding pigments to plastics

You can also opt to include custom additives or pigments in the plastics that your company produces or uses. Being specific to your company, these additives, and which can easily be identified with the help of a handheld device, will help to separate genuine merchandise from market imitations.

7. Using the uFaker app

With the help of the uFaker app you can be able to monitor counterfeiting activities that involve your brand. This information can then be forwarded to law enforcement agencies, private investigators and lawyers.

8. Using the Authenticateit app

You can use the Authenticateit smartphone app to identify, track and deter counterfeiters from selling imitations. Consumers can use the same app to ascertain the authenticity of a product prior to making purchase.

9. Using the Black Market Billions app

Yet another useful solution is the Black Market Billions crowdsourcing app. Users use the app to take photos of possible imitations and upload the images to an online map linked to a GPS locator. Alerts are then sent to consumers of counterfeited merchandise in specific locations.

10. Consumer education

Providing consumers with information about your product will help them to make informed purchases and effectively protect them from the risks of using imitations.

Effective education will help consumers to identify and buy original merchandise

Effective education will help consumers to identify and buy original merchandise

You can use various websites to share information about your product and where genuine merchandise can be purchased. These sites include:

DesignsFauxReal – A website that sells fictitious counterfeit goods. It educates consumers about the negative consequences of purchasing imitations.

The Counterfeit Report – A website through which manufacturers pass information about counterfeits to consumers. Consumers are encouraged to report counterfeits.

Unreal Campaign – This teen-focused website teaches young people about the economic, health and social risks that result from using counterfeits.

Top entrepreneurs have what it takes to steer their businesses through tough times...GRIT

Top entrepreneurs have what it takes to steer their businesses through tough times…GRIT

When times get tough a large business typically makes it through and even achieves growth by harnessing its superior capacity to access capital, bargain better terms, and pursue a greater scope of investment options.

A small business on the other hand has to do all it can to avoid going down during a financial slump. Ill-advised knee-jerk reactions to such a scenario may include the prompt laying off of some employees or shutting down of some branches.

More prudent business owners will however be more intuitive in their responses. They’ll want to know what measures can be implemented to keep the business afloat until profitable winds start blowing again.

By adopting a survival mentality there is a good chance that your business will remain intact through crisis times. You will also find it easier to pick up and continue when the economy rebounds.

This is unlike a business that opted for rash responses, such as the ones above, which are really last resort measures. Such a business will no doubt lose momentum seeing as time, money and other resources will have to be expended in hiring new employees, securing premises, winning back lost clients, etc.

What therefore are some of the strategies you can embrace to cope with crisis times?

1. Reinventing your business

After all, necessity is the mother of invention...

After all, necessity is the mother of invention…

When times are good many small business owners direct all their focus on making the most of the currently available opportunities. This is all good but it’s done at the expense of diversifying the scope of focus.

For such a business, a slump in demand and sales has an almost crippling effect on operations and the owner may be at a loss about how to proceed.

How about recreating the business? Start by analyzing your strengths and weaknesses and then think about another sector of market where you can be a fit.

  • Consider your current products/services; does demand still exist or have customers preferences changed?
  • What are the new trends in your industry; have you kept up?
  • What steps can you take to become relevant again?
  • Do you need to develop new products/services?
  • What is required?
  • Do you know what customers need and how much they are willing to pay?
  • What new products/services can you develop?
  • How will you best reach the new clients?
  • Do some of your old clients fit in your new target market? Can you use them to get more customers?
  • Will these products/services earn you maximum profit?

Repackaging your business and getting back on track may take some time.

Take heart though.

The course of action you opt for will most likely be quite familiar to you (thanks to your experience so far) such that making inroads won’t be too difficult.

2. Create other revenue streams

Can you think of other ways to earn money in addition to your core business activity?

Can you think of other ways to earn money in addition to your core business activity?

You must start thinking about how else you can earn revenue in addition to what you are doing currently. This is about finding out what else you can do with the current resources at your disposal.

If, for instance, you own a barber shop and business is slow because three new barber shops have opened up on your street, why not think about offering other men’s grooming services. Many men are now warming up to manicures and pedicures. How about making your shop a one-stop grooming shop by partnering with personal beauty pros?

3. Seek out your former customers

Pick up the phone and call past prospects - perhaps a deal can be struck

Pick up the phone and call past prospects – perhaps a deal can be struck

You never know. What harm can there be in finding out? Who says a former customer can’t be convinced to start buying again? Perhaps he or she is disappointed with a current supplier’s quality.

Are there customers who left because their priorities changed? Might they have changed again? Why not find out if their current preferences are within your scope? Perhaps they can even refer new clients your way.

Maintaining a professional relationship does have its perks.

4. Find former prospects and other people on your contact list

Find out if your contact lists can yield new leads

Find out if your contact lists can yield new leads

When times were good and demand was booming you probably had several cases where potential business deals fell through for one reason or another.

Perhaps some projects you were eyeing didn’t materialize because the prospects had to put them on ice at the last minute.

Try getting in touch with such prospects to find out if such opportunities still exist.

5. Make strategic alliances

Create mutually-benefiting relationships with other businesses; seek and return favors

Create mutually-benefiting relationships with other businesses; seek and return favors

It is worth exploring the industry to find businesses that you can work together with for strategic benefits. This can expand your scope of exploitable opportunities meaning that you’ll still be in work even when your core area’s prospects become lean. Sooner or later you’ll be the one extending the favor.

Also, having a strategic partner will help to propel your market penetration efforts considering that you are most likely facing off against bigger competitors.

6. Explore the online marketplace

Aggressively sell your products/services online

Aggressively sell your products/services online

Many offline businesses owners may be surprised to find out that there are lots more potential customers online.

Don’t be ignorant; simply find out if this is the case and how you can exploit the potential.

Perhaps you do sell online but you are experiencing declining sales. Now is the time to find out if your previously successful strategy has been too limited in scope and if there are new channels to discover. Find out which aspects of your e-commerce site must be improved. Perhaps your marketing strategy is inefficient. How can this be revamped?

7. Make the most of free publicity

If your business has interesting things to offer people will talk about it

If your business has interesting things to offer people will talk about it

Whenever you get the chance to spread the word about your business don’t hesitate to do so. Word-of-mouth is highly effective and absolutely free – find out ways to always be on people’s lips.

8. Start doing more on social media

Use social media to optimally market your business

Use social media to optimally market your business

Simply having a social media presence is not enough – you must get active in these channels.

Start interacting better with your target audience. Take time to post comments regularly. Ensure that clients’ questions and comments are responded to promptly. Engage your audience by discussing matters related to your products/services and the industry at large. Don’t forget to advertise your product/service on social media.

9. Make your business mobile-friendly

Your business should move with the times - embrace the mobile platform

Your business should move with the times – embrace the mobile platform

An increasing number of people (read your target audience) are becoming accessible via tablet and smartphone for a greater part of the day. This as opposed to when desktop computers and laptops were the only means of internet access. Is your business mobile-savvy yet? It needs to be.

10. Review your business budget

Reviewing your budget downwards will be absolutely vital

Reviewing your budget downwards will be absolutely vital

This is very applicable for small businesses that have departments to handle various operations.

Require your managers and supervisors to list suggestions about how expenditure can be reduced in their respective departments. To motivate them you can pose this as a challenge. You can, for example, promise a handsome reward for the departmental head whose cost-cutting initiatives resulted in the greatest percentage reduction in allocated budget.

You should also consider the expenses you can influence directly and immediately. Is it possible to opt for a cheaper package for your telephone and software requirements? Have you been taking advantage of attractive discounts and deals typically offered by service providers?

How about the lease terms for your premises or equipment? Are you being overcharged considering current market rates? Are there cheaper options?

11. Find new ideas for profitability

Now, more than ever, is the time to summon your  firm's creative minds

Now, more than ever, is the time to summon your firm’s creative minds

This should also be done in collaboration with the staff. Now is the time to really brainstorm for viable ideas that can actually be implemented in the short-term to alleviate the crisis. Winning ideas should be well rewarded.

12. Rethink your positioning

Giving your business a unique market proposition is a sure way to draw more clients

Giving your business a unique market proposition is a sure way to draw more clients

Think about how you can uniquely present your business to the target audience.

What are some of the qualities you think that only your business can offer customers?

Re-position accordingly and let your customers and prospects know about the extra value they’ll get by doing business with you.

13. Make your turnover rate faster

Find out why your stocks are taking too long to sell and then make amends immediately

Find out why your stocks are taking too long to sell and then make amends immediately

Review your business operations to find out what practices are encouraging slow turnover.

Is it that your inventory lies idle for lengthy stretches? Find out if you can purchase less stock instead of tying down too much money at the expense of your profits.

Is it that many of your customers are simply taking too long to pay up? Perhaps offering attractive discounts for prompt payment will help.

Perhaps some of your products are taking too long to sell. Think about reducing package quantities, or end production altogether.

14. Negotiate better terms with your vendors

Convince your suppliers to extend your payment periods

Convince your suppliers to extend your payment periods

To secure better cash flow for your business engage your vendors and convince them to give you more time to settle your invoices. Use this cash to keep operations flowing.

15. Revise your payroll cycle

Paying your staff less often will enhance the firm's cash flow

Paying your staff less often will enhance the firm’s cash flow

This will generally work in the same way as no.14 above.

Perhaps you currently pay your workers weekly – change this to biweekly. In case you currently pay them biweekly, change this to monthly.

You will not only have better cash flow but it’s possible that current payroll processing costs will be significantly reduced, more so if you have a large workforce.

16. Go green and minimize wastage

Insisting on energy-saving initiatives will result in considerable power bill savings

Insisting on energy-saving initiatives will result in considerable power bill savings

Take all the necessary measures to ensure that energy costs are trimmed. Basically, adopt energy-efficient practices at your workplace.

Ensure that all lights are switched off when they are not required. All office equipment must also be unplugged at the end of the day.

According to the ENERGY STAR program 40% of electricity consumption by home electronics happens when they have been turned off but not unplugged. The potential savings that you can make on costs of power are evidently quite significant.

The same measures should be taken for everything else including time. Enact a strict policy against lateness and inability to meet deadlines.

17. Cut down on travel expenses

Video-conferencing is so much more cost-effective as compared to traveling

Video-conferencing is so much more cost-effective as compared to traveling

By taking advantage of technology you can significantly trim your travel budget. Have you considered video conferencing?

Again, do you really have to fly first-class? How bad can business class be?

18. Consider making changes to your workforce’s employee status

Hiring freelancers and independent contractors will significantly lower your wage bill

Hiring freelancers and independent contractors will significantly lower your wage bill

If you have hired your team on full-time basis you may want to consider making them independent contractors.

Assuming you have been honest with the team about the current situation they will most likely appreciate that they’ll still have jobs.

Their new status means the business will no longer have to pay payroll taxes and/or health insurance benefits, all translating into money saved.

Knowing how to stay afloat during hard economic times is crucial in determining whether your business will survive or go under. Has your business had to ensure such times? What was the crisis like and how did you pull through?

Cash is truly king!

Cash is truly king!

To grow and make a success of your small business you must embrace prudent cash flow management. The old business adage “cash is king” has very practical implications for business owners.

Indeed, while long-term business failure results from an inability to make profits, short-term business failure happens when a business doesn’t have enough cash to pay its bills.

The basics of prudent cash flow management are rather obvious. Money inflow must exceed money outflow.

Money inflow must be prompt and timely to facilitate new stock acquisition and payment of suppliers. When cash is easily accessible you can considerably tilt buying and negotiating terms in your favor; this will no doubt boost profitability in the long-term.

Good cash flow management will also enable you to better anticipate shortfalls in money inflow thus allowing you to initiate timely contingency measures e.g. securing favorable credit terms.

What therefore are some of the prudent cash flow management practices that you as a small business owner should implement?

1. Reviewing your cashflow systems

Regularly review your cashflow systems to ensure that the business is not losing money

Regularly review your cashflow systems to ensure that the business is not losing money

Begin by going through your cashflow system in order to identify possible loopholes through which the business may be losing money. Accordingly, put in place a system that will ensure customers are always invoiced for products/services sold and promptly so. Now your system should at a glance show what is owed to you by clients and what you owe your suppliers.

You should also be able to quickly ascertain that you are only paying for supplies received; failure to do this may result in some of your suppliers routinely overcharging you and/or billing you for supplies not received.

It is also worth working out a payment structure that will see you make payments to different suppliers on different dates over a suitable time period instead of paying all of them at once.

2. Creating sales projections

Accurately estimating sales volumes and inventory requirements enhances cashflow management

Accurately estimating sales volumes and inventory requirements enhances cashflow management

Monitoring daily sales will help you to accurately estimate your inventory requirements. You will thus be able to make well-informed purchases and thereby avert the possibility of overstocking inventory for which you will incur storage and maintenance costs.

Additionally, referring to past quarterly sales and future estimates will help you to sensibly budget and plan for inventory purchases.

3. Insisting on deposits for large orders

Insist on receiving a deposit when the order is substantially large

Insist on receiving a deposit when the order is substantially large

Upon receiving a large or unique order it is prudent to insist on a security deposit that is equal to or more than half the total price. A distinct characteristic of unique products is that they have a limited sales value, typically to the person making the order.

In the event that these products are no longer considered as valuable to the client as before, you become subject to the risk of receiving a lesser payment than was initially agreed. Insisting on a deposit will therefore go a long way in helping to reduce your financial loss should things go haywire.

When you are the one making orders, however, try and avoid paying deposits. This especially applies when you are dealing with suppliers well known to you. Simply ensure that your credit history and relationship with a supplier remains positive over the long-term and this will spare you the need to make deposits. This cash can serve better purposes elsewhere.

4. Designing beneficial terms of payments for large orders

For significant orders you may need to come up with mutually beneficial terms

For significant orders you may need to come up with mutually beneficial terms

Sometimes it may be impossible to demand for deposits upfront e.g. if the client firm has limited financial muscle or has a policy against making initial deposits for orders. A proactive business owner will in such a case come up with a negotiable payment plan based on tangible benchmarks.

Not only should such a plan be agreeable to both parties, the payments made should suffice or exceed the costs incurred in delivering the order.

For example, given an order to screen-print 1000 t-shirts, the printer may require the client to make a 15% payment after the t-shirts have been purchased, another 35% after the screen has been designed and inks purchased, and 40% of the total agreed amount be paid in four installments as batches of 250 t-shirts each are delivered. Only after all the 1000 t-shirts have been delivered and inspected for quality will the remaining 10% be paid.

5. Offering discounts to encourage quick payment

Make your terms as attractive as possible to encourage prompt payments

Make your terms as attractive as possible to encourage prompt payments

To accelerate cash inflows it might be a good thing to offer discounts to clients who will remit payments well before normal payment term periods elapse.

Typically, invoices are meant to be settled 30 days after receipt, but if payment is made within the first 10 days a 2% discount is given.

Knowing your clients payment habits and your business’ requirements you can make a decision to make this discount rate more attractive for clients who are habitually late.

Such an approach won’t work across the board though. It might work when you are trying to secure more business from a promising startup but you certainly mustn’t apply it for a big client who gives you big business every month but always pays up after 40 days.

6. Enforcing credit terms

Don't hesitate to enforce your terms when payments are not forthcoming

Don’t hesitate to enforce your terms when payments are not forthcoming

Your cashflow will suffer when you extend credit to slow-paying customers. Having identified such clients you need to negotiate new terms that will compel them to settle their accounts quicker.

New clients must know that your business is very particular about prompt payments. Prior to doing business with new clients it is prudent to check their credit reports.

7. Harnessing cashflow management technology

With the help of accounting tools like QuickBooks and Pulse you will have an easier time figuring out your cash inflows and outflows, keeping track of due receivables and payables, and so on.

8. Making the means to get paid more convenient

PayPal greatly conveniences buying and selling

PayPal greatly conveniences buying and selling

As a small business owner you need to make it easy for your clients to make payments.

You can, for example, invest in technology from Tradeshift or Basware to allow your clients to pay invoices via the Cloud. This will not only hasten cash inflows but will also help to avoid the errors and delays characteristic of the paper invoice trail.

Yet another option courtesy of Zapper Scan-to-Pay is to issue clients with invoices that feature QR codes. Using a smartphone a client simply needs to scan the code, confirm the amount, and make payment, all within a couple of seconds.

Other payment options you can avail for your clients are PayPal, Eftpos and credit cards.

9. Ditch pitching in favor of attracting new customers gradually

Gradual nurturing of business relationships is a much better way of finding new clients

Gradual nurturing of business relationships is a much better way of finding new clients

Sourcing for new business opportunities via pitching has been shown to be counterproductive seeing as time and resources are expended on an exercise that may not yield any income.

Today, many small business owners are attracting new clients by gradually growing relationships with them. Beginning with informal interactions and conversations, such a relationship grows from strength to strength as required. With several such relationships it is almost certain that new business will continually become available moving forward.

I sometimes think that this approach is akin to organic SEO where visitors tend to prefer/trust naturally-ranked (gradual relationships) websites more as compared to paid results (pitches).  

10. Opening a business credit card

It's prudent to have separate credit cards for personal and business use

It’s prudent to have separate credit cards for personal and business use

Keeping personal funds and business funds separate is a no-brainer.

With a business credit card you will easily be able to keep your business and personal credit separate, build the business’ credit, and avoid a scenario where qualification for business credit will need backing from your personal credit.

Keeping these lines of credit distinctly separate is one of the basics you must comply with if you have your sights set on more investment and business growth.

11. Offering fixed rate payment packages to your clients

Offering your service as a periodic package will guarantee regular cashflow

Offering your service as a periodic package will guarantee regular cashflow

Periodic payment packages are quite ideal for purposes of ensuring that good cashflow is sustained. This approach can work really well for businesses that have traditionally used the hourly rate as the basis for payment e.g. freelance writer services.

With the hourly rate there is really no way of estimating what your income will be month to month. However, developing retainer packages based on a fixed number of hours per month, and having clients pay up in advance, is an effective way to take total control of your finances.

Getting payments in advance means that you can account for your spending and business growth using actual figures rather than estimated ones that may eventually not tally considering that some of the arrears may never be settled.

12. Maintaining and repairing rather than replacing capital equipment

Regular equipment maintenance is crucial for  prolonged service life

Regular equipment maintenance is crucial for prolonged service life

Your business will enjoy better cashflow if crucial equipment is well maintained and expertly repaired when damage occurs instead of being replaced immediately. As a business owner you should ensure that equipment undergoes regular maintenance in order to detect/forestall possible damage and to restore efficiency.

In case some parts need to be replaced opt to source for these from third-party suppliers rather than the original manufacturers because the latter option is certain to be way more expensive. Also, find reputable technicians to handle complex repair/maintenance tasks instead of reverting to the manufacturer.

13. Going for used equipment instead of new equipment

Used equipment is cheaper to buy and typically offers satisfactory service

Used equipment is cheaper to buy and typically offers satisfactory service

Scour the marketplace in search of well-maintained used equipment when it becomes necessary to purchase additional or replacement machinery. Every now and then you will come across ads and auctions notices giving sale details of some equipment you may require. Buying such equipment will typically see you spend just 20-30% of a new machine’s price; the used machine’s capability will nevertheless be equal or just slightly less than what you would get from a new machine.

Leasing equipment can also be considered when your business’ cash flow is faltering. Expect to spend more in the long-term though.

14. Selling off obsolete/excess equipment or inventory

Retaining idle/obsolete machinery can be quite expensive

Retaining idle/obsolete machinery can be quite expensive

Having idle equipment at the workplace translates into wasted space and tying up of capital that can be devoted to other more productive causes.

Excess inventory is always at the risk of becoming worthless or obsolete especially where customers preferences change rapidly and new materials are rapidly adopted.

Inventory that you are unlikely going to use in the forthcoming 12 months may be worth selling off especially if retaining it will be substantially expensive and expected proceeds from the sale minimal.

15. Adopting subscription sales

Magazine subscriptions are paid for upfront; this is greatly convenient for the service providers' cashflow

Magazine subscriptions are paid for upfront; this is greatly convenient for the service providers’ cashflow

Subscription programs are best created for businesses whose products are repeatedly repurchased and consumed multiple times a year e.g. magazines and landscaping services. You might want to think of this approach as a means to boost cashflow considering that customers will be required to prepay for the products and delivery. This arrangement will allow you to secure future sales and cover the expenses involved.