By Terry Corbell
The Biz Coach
How You Can Position Your Micro Business to Win
Small businesses are trying to cope with a longstanding structural economic problem. It’s nothing new, and makes it a challenge to keep working with enthusiasm.
We all know about the devastation caused by the recession. However, even before the recession hit in late 2007, many small businesses were already off track.
Here are two indicators:
First, the National Federation of Independent Business, reported its index of optimism among its members was down in early 2007. One gauge is employment. While 14 percent planned to hire more workers, 9 percent were planning to scale back their workforce.
Second, a 25 percent increase in credit card debt among small businesses raised eyebrows, according to the Small Business Administration (SBA). The SBA said the number of small companies with loans under $100,000 skyrocketed 25 percent – from 15.2 million to 19 million businesses – from 2004 to 2005. Seventy percent of that increase was in credit card debt.
Loans for small businesses the previous year only increased 5.3 percent. So, the 25 percent credit-card debt trend was not a good omen heading into a New Year.
The SBA studied the lending of $1millon or less to 21 million companies by 8,799 banks. The aggregate debt: $600 billion.
All of this data underscores the important of due-diligence and hard work. How are you poised to succeed in this landscape?
Here are some basics to consider:
Financial. Utilize the services of least a part-time, proactive accountant – get references, determine a division of responsibility in the event you’re audited, and choose a personality that meshes with yours.
Or, if budget is a challenge, purchase financial management software to produce accurate financial statements (balance sheet and profit-and-loss).
Track sales-to-expense ratios every 30 days. Monitor your inventory levels and project sales, receivables and cash – make certain to adjust your spending accordingly. Remember cash is king. Here’s why and how to determine your break-even point.
Understand the ratio between accounts payable and accounts receivable and their impact on cash flow. Focus on a capitalization approach for stability. That includes your earnings; and if necessary, short-term and long-term loans.
And closely monitor the work and performance of your accountant or financial advisor.
Strategic Planning. For overall business improvement, evaluate whether you need to make changes in the following:
- Your company’s focus – do you need new products or services?
- Cutting expenses
- Develop opportunities for growth
- Design an effective strategy to raise fees, prices or retainers
- Evaluate the most cost-effective revenue streams
- Leverage assets or resources for additional revenue
- Change vendors or strategic partners
- Evaluate systems, products or services needed to improve your billing, client service, marketing and selling
- Use 11 strategies to keep your small business floating above water.
Marketing. To increase revenue, consider:
- Analyze your strategies for shameless, self-promotion or marketing
- Assess your tactics in relationship-marketing
- Identify activities or organizations that are ideal to help you align your business goals and target the right clients or target audience
- Upgrade your networking strategies
- Develop new marketing collateral (i.e. blogging, brochure, courses, newsletters, reports, sales letters, teleseminars, webinars or workshops,)
- Use the 10 best marketing tips for growth even on a tight budget.
From the Coach’s Corner, don’t forget your personal improvement.
Here are some reminders:
- Identify what you need to read – business books, publications, Web sites or reports
- Determine which of your skills that need development
- Obtain a mentor
- Decide on enhancements needed in your office or home for better efficiency, inspiration or organization
- Here are more solutions to rejuvenate yourself and business.
“Passion is the single most powerful competitive advantage an organization can claim in building its success.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.