When you first launched your business, you probably thought you’d bought your ticket to a freer and more relaxed lifestyle, right? By now you may have learned that the opposite can be true, especially in the first few years. If your business is failing to thrive quite like you’d imagined, the following process may help you get back on track:
Step 1: Evaluate your state of play
You can’t create an effective plan to move forward until you know the exact state of your business. Assess your current outgoings, income and projections for the next 12 months and identify any gaps (such as holidays or low-demand periods) where you may need to plan around cashflow shortages.
Step 2: Minimise financial waste
As part of your business review, assess every area of expense and find ways to minimise waste and improve efficiencies. Can you negotiate better deals with your suppliers, or outsource certain tasks more effectively?
Step 3: Reboot your marketing
Evaluate your marketing return on investment (ROI) so you can stop wasting time and money on activities that don’t deliver a strong result. You can do this by finding ways to measure the effectiveness of your marketing activity and explore no/low cost strategies to publicise your business. “If you have a proven business model, social media can help you promote it and take your sales to the next level,” confirms digital strategist Gina Lednyak, L&A Social.
Step 4: Seek an advisor
You might not be able to come up with all of the answers on your own, especially if you’re a sole trader. Explore sources of free support and business advice, such as these online resources, but don’t rule out paying for tailored expertise from an accountant, mentor or advisor if necessary.
Step 5: Kick ‘nice’ to the curb
You may think you’re doing your customers a favour by being nice and giving them leeway when paying invoices, but by not enforcing your payment terms you’re actually creating undue stress on your business – not to mention exposing yourself to the risk of bad debts. Don’t be shy when following up overdue invoices and if you don’t already have an effective credit control system, now is the time for a processing overhaul.
Step 6: Boost your prices
It goes without saying that you shouldn’t hike your prices if your market can’t support it. However, after you’ve conducted some market research on your competitors, work out whether you can justify increasing your prices. In real terms, your costs are rising every year with increases in CPI, but even a 5 per cent price increase could recoup inflated expenses and noticeably boost your annual income.
Step 7: Boost your product or service offering
Look for innovative opportunities to sell more to your existing customers, through offering new products and services, upgraded services or discounts for buying in bulk/in advance. You could also offer rewards or referral incentives for recommending your business to new customers.
Running a business successfully can be a hard slog, but there are countless rewards once you set your foundations and start to build momentum. With a few targeted tweaks, a business delivering mediocre returns can really kick into high gear.
