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Here are 5 top tips for keeping your small business afloat.
1. Simple: Stick to The Budget
This is important for any business and it relies on good bookkeeping and constant self-monitoring. It is essential to track your budget against what you actually spend each quarter. In this way you can attempt to prevent cost overruns before they occur. Before making a purchase that is not in your budget always ask yourself WHY?
2. Keep Your Eye on Business Development
In order to win business and gain sales small businesses need to be building relationships and following up on leads all the time. Daily timesheets can help you to record how you're spending your time on this critical marketing activity. Use this data to calculate how much work you can actually complete in addition to your business development activities.
3. Keep Track
Not only must you review your budget for revenue and expenses, you should also be tracking the actual numbers. If you're using a basic spreadsheet, include an actuals column next to your budget column so that you can record what you're really spending versus what you budgeted as the year progresses. Be sure not to overlook the obvious growing pains associated with any business such as processing errors, emergency breakdowns of equipment etc. In terms of marketing, remember that you have to spend to create opportunities to sell. This means that there should be monthly spending activity for marketing.
4. Do Your Homework
Before you get too far down the line you should be armed with answers to the following questions:
- How much your products or services cost in the competitive marketplace?
- How much do companies like yours pay in expenses on average to operate weekly, monthly and annually?
- What is the standard timeline for delivering similar products and services?
- How much each supply chain component costs in similar companies in time and money?
- What is the standard profit margin?
5. Keep Your Feet on The Ground
Planning for revenues and expenses ensures a better understanding of what opportunities to pursue in any fiscal year. You'll want to know how to price them, and most importantly you'll get clear about how many opportunities you must win to turn a profit. When setting objectives, there is no magic wand to earn greater profits. Through consistent efforts you'll do three things; increase revenue, fulfil your company's mission and move closer to making a profit.