small business articles business management businesses Marketing sales Technology Business finance Lean Manufacturing small business Investing articles employee health

Strategies for healthy small business finances

One of the most important tasks that you have as a small business owner is to monitor and manage the finances of your business. If you fail to do this you may find that you are quickly going out of business. Studies have shown that the number one reason that small businesses fail is that despite great sales numbers they do not have someone actively managing their finances. This should be avoided at all costs. In today's current economic conditions small business owners need to be vigilant in managing the finances of their business if they hope to succeed long term. Here are some strategies for healthy small business finances-

- Stay on top of what you are spending-Managing what your small business is spending is an integral part of business finances. If you are not aware of what is being spent chances are that you will soon find yourself in serious financial trouble. The best strategy is to make sure that your costs are pared down as slim as possible. Employees should be trained to watch for and obtain the best price for everything that is used with the business. You should also take a close look at what every vendor is charging you. Do not hesitate to shop around and make sure that you are receiving the best price.A good measure is holding up every cost against the standard of comparison of if it doesn't contribute to the bottom line then you should get rid of it. There is a note of caution that should be exercised here. Cost cutting works best when it is done with precision. The best method is to is to make sure that you hit the right middle ground and don't cut too little or to much, since each strategy could be highly detrimental to your small business.
- Don't underestimate but reevaluate your marketing-Many small business owners make the mistake of thinking that when times are difficult that they should cut their marketing back. This is a mistake. It is important to realize that your customers don't know automatically where to find you or what you can offer them. Your marketing message is what tells them this. Instead of cutting marketing small business owners need to focus on using highly effective marketing methods that are low cost or even free. Remember, that you need to market both to your existing customers while still trying to obtain potential customers. The best strategy is to take a close look at every dollar you are spending on marketing and make sure that it is being spent as effective as it can be.
- Keep on top of accounts receivables-One of the major problems that slows down the growth of a small business is carrying to much in accounts receivables. It is crucial that in order to keep the finances of your small business healthy that you carry as little accounts receivable as possible. Remember, that if you are carrying accounts receivables this is cash that you could be using somewhere else to increase profits. You need to have a payment plan in place that lets your customers know that you expect prompt and timely payments. Then if you do not receive payments in a timely manner you should follow up with an established collections procedure. The reality is that while you want to deal with your customers fairly carrying to much accounts receivable can seriously damage your bottom line. The best strategy is to have a payment and collection plan in place to hold down the amount of accounts receivables that your small business is carrying.

FREE: Get More Leads!
How To Get More LeadsSubscribe to our free newsletter and get our "How To Get More Leads" course free via email. Just enter your first name and email address below to subscribe.
First Name *
Email *

Get More Business Info
Sponsored Links
Recent Articles


Copyright 2003-2020 by - All Rights Reserved
Privacy Policy, Terms of Use