Top ten tips for small businesses in 2014
This article has been reproduced from Real Business. You can read the article on the website here
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.
6. Increase your marketing
When competing for a smaller pot of money, it becomes more important than ever to tell people why they should come to you. You don't have to break the bank, but be sure to shout about your business. However, it is vital that this is done efficiently and effectively. Consider which method is best suited to your business, such as telemarketing; online advertising; mail shots; or radio/TV. Monitor any marketing you carry out, to measure its success and determine whether it is worth continuing.
7. Concentrate on what will sell
Don't put your efforts into trying to sell new or untested products and services; stick to profitable favourites. Don't be tempted to slash prices either – if demand for your offer is not price sensitive, you will be giving your profits away.
8. Train your staff
Your staff are one of your greatest assets and could be the key to retaining customers and keeping your business running. Training is important to their personal development and the productivity of your business, so don't be tempted to scrap your training plan.
9. Streamline your operation
Consider moving to smaller premises, or even subletting some of your existing space. Sell off excess equipment and look at your staffing – are your people concentrated in the right areas? Would flexible working be more cost-efficient? If you are considering making staff redundant be sure you take into account the adverse impact this can have on the remaining staff and the time and cost involved in recruiting replacements when business picks up.
10. Get online
An online sales or marketing channel will expose you to a larger marketplace for minimal cost. Plan and resource online selling properly, including providing payment security, attracting visitors and meeting orders swiftly. Making small changes to your existing website could increase your customer base and improve your bottom line.