3 Strategies To Stay Afloat In Trying Times
I've recently discovered three brilliant—and easy—ways to improve the financial position of my business, but I'll get to those in a moment.
First, let's talk about why these simple changes are important. The global economy has been hurting for years now and the expected turnaround has taken longer and been more drawn out than most people anticipated. For small business owners, this new economy offers loads of opportunities, but it also brings a mountain of struggles and challenges.
To overcome these challenges and build profitable businesses, we need to focus on clear and effective business practices. That said, here are three quick changes that could save your business.
1. Use checklists
There is scientific data backing this suggestion up, so please don't dismiss the idea as "too simple."
In his book, The Checklist Manifesto, physician Atul Gawande relies on a wealth of research and data to discuss the power of checklists at length. He uses real world examples of pilots, surgeons and construction workers all using checklists to avoid errors, focus on the essential and complete their tasks in a successful manner.
Guess what? Checklists can work in your business. I'm willing to bet that you know what you should be spending your time on in your business. If you think for just a moment or two, you can probably identify the activities that bring in money for your company.
Of course, that doesn't mean that you're always doing them. It's OK. I've been there, too. A client calls first thing in the morning and before you know it, you're two hours in and you haven't accomplished the first thing on your to-do list. You check e-mail when you wake up and you're battling your inbox until noon. You spend an hour or two tweaking your website or social media profiles when you should have been contacting leads.
Checklists can help you avoid these mistakes.
What are the tasks that you need to do everyday? Put them on a checklist. What are the mistakes you've made with previous clients that you can't afford to make with future ones? Put them on a checklist.
2. Hire interns
If your business is on the rocks, then you might have to start working more. Or worse, you may have to downsize. Either way, you're going to end up with more work than you and your employees can handle.
Thankfully, there is a massive group of young, bright and ambitious people ready to help you out for free. They can be found at colleges and universities all over the world and they are dying for some real world experience to put on their resume.
Are unpaid interns the perfect solution? Of course not. For one thing, you do have to provide actual education and experience—interns aren’t simply free file clerks. Make sure your internship meets all the requirements.
But if you have projects to staff and you don't have a lot of money to spend, then interns can be one of the best ways to bring able-minded employees on board to get you through the tough times.
3. Develop a new cash flow positive revenue stream
Cash flow is the lifeblood of a small business. I'm not going to cover all the problems of poor cash flow here, but to put it bluntly: If you don't have enough cash flow to cover your operating needs, you've got problems.
So what can you do? Better accounting and bookkeeping can help you keep a handle on the situation and improve your cash flow position, but that's just one part of the picture. The real issue is that you need more cash inflow and less cash outflow.
Assuming that your costs will remain about the same, one quick way to improve your business is to create an additional revenue stream that is cash flow positive.
The basic idea is that you receive your cash inflow before you have to pay your cash outflow. This is a good idea for business in general, and these revenue streams are easier to create than you might think.
You could take a picture of the new item you want to sell before actually purchasing it and stocking the inventory. Sell the item, use the order payment to purchase the good, and ship it. (Just be sure that you're only doing this with items that you know you can fulfill.)
Regardless of where your business stands, take a moment to think about these three ideas and how they could help lower your operating costs, improve your revenue numbers, and foster a healthy business.
James Clear is the founder of Passive Panda. He is an award-winning writer on business strategy and entrepreneurship and has delivered speeches in the United States, the UK and Switzerland.