I deal with a range of businesses helping them to find the right financing solutions for their needs. Whilst I see lots of things they are doing well, I also see common areas where they can improve. Whether it’s savings on costs or testing out a new marketing tactic, a little tweak here and there can make a huge difference to your bottom line. I’ve summarised them into six actionable insights.
1. Review your fixed costs
Your fixed costs might include things like insurance, rent, salaries and utilities. Look at the expenses on your budget sheet, does it look like you might be overpaying on some of these fixed costs? Of course, you might not always have much leeway on what you pay – rent being a good example. However, there may be opportunities to change a supplier or renegotiate terms and save money.
2. Improve efficiencies
Identify where you can improve efficiency. For instance, chasing your debtors quicker and changing your payment terms can make a big difference. Efficiency is all about being proactive rather than reactive. Having a clear internal policy and defined process to ensure your accounts are paid on time is just one way to be more efficient.
3. Harness social media
We have seen some really impressive growth from businesses harnessing social media as a platform to increase the visibility of their businesses. This is a media which pretty much did not exist 10 years ago and has developed massively in recent years. Most businesses now have some kind of social media presence and some even favour a Facebook page over a real website. Setting up an account costs nothing and done correctly it could really boost your brand awareness and sales.
4. Don’t neglect business planning
You can’t open a shop, for example, and just expect people to come and buy goods from you. Having a robust business plan is essential. This should encompass market research, competitor analysis and customer profiles, as well as an outline of the strategy and tactics for achieving your goals. Most importantly, though, treat your business plan as a working document – something that evolves just as your business will.
5. Recruit the right people
Getting the right people in your business is so important. While the country does have a skills shortage, I’m not seeing enough businesses looking to develop young people through apprenticeships for example. It may sound like a cliché, but if you take care of your people, they will take care of your business.
6. Understand the importance of working capital
Working capital is a great indicator of a business’s overall health but many businesses lack an understanding of how it works. In a recent survey, we found that small businesses have a great opportunity to improve their working capital. By having a better understanding of your business’s working capital cycle, you can improve your cash flow and create a solid foundation for growth.