Times are tough! Despite the economic downturn apparently being a thing of the past, many businesses are still under stress. If you’re operating in recession mode, the following advice should see you through the tough times.
Keep your eyes on the cash flow
No matter how much collateral you have, your business will fail if you can’t pay the bills. You need cash on hand to pay the rent, electricity and other fees. Having millions of rands tied up in property, forthcoming orders, bank loan promises or clients who owe you money, will not help you with the cash you need now. Implementing an accounting program will go a long way in helping with overall financial management of the business.
Target your sales
Research has shown that business owners who focus on sales have a better chance of survival. Of course you must not neglect the other functions of your enterprise but sales must come first. Don’t worry if you feel that you haven’t the smooth-talking salesman personality. Integrity, commitment and a strong customer relationship management (CRM) system that tracks leads, hot contacts, etc will all breed sales success.
Prepare a finance strategy
One of the ironies of the business world is that when you don’t need finance it is readily available but as soon as you urgently need it, the money fountain has dried up. So if you can, it’s advised to make financial arrangements during the good times in preparation for the bad.
• Collect credit cards
• Raise excess capital
• Apply for a bank loan and extend your business overdraft
• Open up accounts with your suppliers
Find new clients
It is easy to get comfortable with just having one or two main clients. You know them well, can service their needs and they keep you ticking over. This is very dangerous as you have no control over what could happen to their business. Focus energy on seeking out new clients so that if one falls away the orders from others can keep you going.
In the beginning the business owner will be taking on all the tasks from answering telephones to sales. It is important to extricate yourself from doing all these tasks so that you are free to expand your business. The trick to doing this is to employ systems. This allows for delegation and automation of including book keeping, accounting and customer relationship management (CRM). As the owner you will end up with the overall management of each system instead of performing the tasks within them. Of course it’s imperative to maintain systems!
Be serious about your business skills
Running a good pizzeria depends on more than a light crusty base and imported Italian cheese toppings. The best pizza-maker in the world can still be a total failure as a business man. If you want to be successful do not only focus on your craft, build your business acumen and go on courses like Pastel Accounting’s broad range of product related training programmes.
Business owners may well live for their enterprises and it does require hard work but take a break. Not only will a holiday revitalise your stamina and creativity but it will test your business’s robustness. If you come back from a trip and everything is still intact this is a good sign that your systems are strong and independent. A business that constantly needs your attention so that things don’t go wrong is unstable and vulnerable.