Interviews

Safeguarding and supporting sustainable growth in your business

8 min read

27 September 2016

From hiring staff, to growing your customer base and tracking expenses, I know how tough it can be to make informed decisions that provide financial savings and improve the bottom line. Here’s a shortlist of tips for entrepreneurs that may help.

According to statistics from the Small Business Administration, only a third of employer institutions survive beyond ten years or more. This is a far cry from the preceding notion 50 per cent of businesses fail in their first year, but it is obvious starting a business comes with a complex array of challenges.

As as an independent contractor representing Colonial Life, I am a small business myself and I also get to talk to a lot of small businesses as part of the work that I do.

Research the best financial options for you

Make sure you’re aware of all of the financing options out there, the pros and cons of each, if your business will qualify and how to apply. It’s tough for smaller businesses to build credit and provide financial figures needed to secure business loans to aid growth.

Consulting with a financial expert on how best to keep your books, is highly valuable as it will differ from business to business. For example; some companies will want to reduce tax liability, whereas others will want to make their income more appealing to lenders.

Put your customers first

For a small business, every new client is important. As time passes you will start to build a solid customer base and will need to have a clearer overview of client relations.

There are plenty of digital CRM programs and software that can help you manage all facets of your company and create insightful reports to show how successful your business has become and if the goals and deadlines are met.

If you wish to go down a more traditional route, another solution is to hire a customer relationship manager to specifically keep track of all customer-related information and answer any of their questions.

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Keep to set targets

Individual projections can affect the entire budget of your business if they are not met. For example, if you miss sales targets, you can disrupt cash flow and if your expenses are larger than expected in a certain area, you may drain working capital from paying bills.

To avert missed targets, run a monthly budget variance analysis to check you’re on track with your budget. This will allow you to implement immediate changes if you spot a serious problem. Creating a KPI tracking dashboard will also allow you to have complete overview of your business performance and allow you to see which projects are running the most successfully.

Make marketing a must

Many small businesses start with small marketing budgets and don’t always know how best to implement schemes to achieve a maximum ROI. We’ve all heard the saying, “it takes money to make money”, but not every business will be in the position to spend large sums on advertising, equipment and additional employees.

A great solution for small business owners is internet marketing. Utilising online platforms and social media means you are able to compete in the same arena as larger companies, without having to spend a fortune on traditional marketing and PR tactics, which may not be right for your business yet.

Read on the next page for details on negotiation tactics and also where split resources can play a role in your operations.

 

Image: Shutterstock

Negotiate when possible

Some costs can be perpetually lowered by negotiating discounts with companies you buy from. Costs for goods and service make up 28 per cent of a small business’ budget. This is the second highest expenditure after payroll and although businesses are often hesitant to ask suppliers for deals, many B2B companies expect customers to ask for lower rates.

Often when a supplier knows you’re pursuing other options, they are more likely to offer the best possible deal and creating some healthy competition amongst vendors is a good way to reduce costs.

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Know when to delegate or split resource

There are projects and tasks that require small businesses to divide their resources. It can be a real challenge to decide which ideas to prioritise and how to delegate amongst your team. Some projects return higher profits than others, so it’s imperative to leverage these by tracking their outcomes and future expenses.

A good way to manage a project budget is through a resource management software solution which can provide you with a complete overview of your company’s budget and expenses.

Working out approximate costs between projects will enable you to see which tasks have the highest effectiveness at a lower cost and give you clarity as to where best to invest resource.

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Establish business benefits plans

Of course, every business owner wants their employees to feel valued. Leveraging pre-tax and discounted tax savings for you and your employees through flexible benefit plans can help reduce your payroll taxes, increase your employees’ spendable income and ensure compliance with business provisions and regulations.

A good benefits scheme is also a major incentive for an employee to choose to work for you. Finding ways to save on benefit costs means you not only keep within budget constraints, but you also keep your staff happy as well.

While small businesses don’t always have the deep pockets of bigger institutions, it doesn’t mean you can’t flourish or achieve the same level of success. Careful decision making means reduced costs and driving larger profits while fostering sturdy foundations for the future.

If you are creative and capitalise on more efficient technology and marketing channels, you can rapidly elevate your business above competitors and even larger corporations using obsolete methods.

Jessie Avery has written this for insurance firm Colonial Life

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