Four ways you can plan for the unexpected in your small business
It is not easy to run a business, however small it may be. Many things need to be in place before things can work smoothly.
In fact, you’ll be surprised at just how much there is to think about when you start a business. Yes, you may launch a business because you have a particular skill or passion, or post a lucrative gap in the market.
But you’ll quickly discover that much of running your business involves skills you never realised you’d need. And you’ll definitely get used to being surprised by issues you didn’t plan for.
So how can you prepare for the unexpected in your small business? Here are four suggestions.
1) Save for a rainy day
If you business is booming – great! But don’t depend on that always being the case. Businesses can have lucky streaks, experience seasonal downswings, or even just have a poor run out of the blue.
So take a percentage of those sales you’re currently enjoying and make sure you keep them saved inside your business in case you ever need them. (This is in addition to money you put aside for tax!)
Even if your sales don’t drop off, this financial buffer will enable you to invest in new technology or outsource tasks in future if you need, without eating into your salary.
2) Research before you buy
When running a business you’ll always incur expenses. But before you part with your had-earned money, make sure you research properly.
For example, if you’re planning to get an office or desk in a coworking space, have a tour round to see what it’s life, and speak to people who work there for their opinion. Don’t commit yourself to a contract without doing proper research.
Equally, if you’re buying from a new supplier, check out their online reviews and ask for samples. Don’t just take every sales pitch at its word.
3) Don’t neglect your customers
You know what is the one thing that your business absolutely can’t survive without? Your customers. So make sure you treat them well.
And we don’t just mean wooing new customers. You need to maximise the lifetime value of every customer (it’s far cheaper to retail an existing customer than it is to acquire a new one).
If you don’t keep your customers happy (and returning to you) you’ll quickly be surprised at how your initial flurry of orders from a marketing or ad campaign or promotion dwindles away… only to be refreshed with spending money and time on yet more marketing.
So treat your customers well, give them great customer service, ensure your products or services delight, and nurture them so they’re happy to buy from you again, and again, and again.
4) Get your cash flow in order
Every business needs a healthy cash flow, and yet so business owners pay little attention to theirs. And as a result, either lose money from late or missing payments, or waste valuable time chasing them.
Setting up proper systems in place – like these 10 essential elements of a health credit control system – mean that you’ll minimise late invoice payments, and save yourself a LOT of time and stress. And the good news is that these elements are all easy to implement.
Without these systems in place ensuring that the money you’ve earned actually makes its way into your bank account you could soon run into trouble and find you don’t have enough cash in the back to pay your business expenses, let alone your salary.
So spending a little time now setting up proper cashflow systems isn’t a luxury – it’s a business essential.
Photo by Sigmund