What do small business owners need to do next year to grow their businesses? Make these 10 tips your resolutions for 2014:
1. Mind your cash-flow
Understand exactly what your finances are telling you. Issue invoices promptly and chase up debtors; don’t buy more stock than you need; negotiate longer credit terms with suppliers; shorter ones for customers; fill up gaps in your forward order book; and keep in touch with your bank.
In addition, you can impose late payment charges on any customer that does not pay on time.This will not only encourage prompt payment, but will also cover costs incurred by late payment.
Legally, you are allowed to apply late payment charges 8 per cent above the Bank of England base rate on unpaid bills.
2. Cut your costs
Look for savings in every part of your business. Making your business greener isn’t just about saving the planet, it can also save money. Do you turn equipment off at night? Is every business journey necessary? Are you taking full advantage of your tax allowances?
Try to negotiate new terms and conditions with your suppliers. If you are a regular or long standing customer, they will probably be willing to provide you with longer payment terms or a reduction in price in order to keep your business.
3. Credit check new customers
It could take only one major customer to go bust to jeopardise your business. Protect yourself by conducting rigorous credit checks on new customers and agreeing clear credit terms up front.
Using credit reference agencies will provide extra protection against bad debtors, although this must be balanced against the cost of using their services.
4. Focus on retaining customers
When finances are uncertain, consumers cut their spending – so do all you can to keep your customers coming through your doors. Loyalty schemes, small discounts and regular communications can let your customers know you value them.
Corporate Social Responsibility has become an increasingly important issue for many consumers and could provide a new way of attracting and retaining new customers. Taking steps such as supporting local initiatives and becoming more environmentally friendly may help to differentiate you from the competition.
5. Provide outstanding customer service
How else can you differentiate yourself from your competitors? By giving excellent customer service!
Consumers appreciate businesses that give them more for their money, especially when times are tough. Efficient service, fast delivery and flexible payment terms will help to persuade people to spend with you rather than a competitor.
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