Steps to Reaching Your Business Financial Stability
Just like any goal, getting your finances stable and becoming financially successful requires a plan. Success requires managing your finances. Stability is crucial for the smooth functioning of your business and to achieve success. With stable finances, you will be able to grow your business further and make it profitable.
Making money does not equal stability.
Stability can stand firm against any temporary financial problem like decreased sales, loss of critical employees, lack of capital, or any client or customer loss. There is no substitute for having your rolling three-month cashflow projections. Knowing how you might negate the effect of adverse scenarios will strengthen you and your team. Here we are sharing strategies that can help you to create your financially stable business successfully.
Create a plan for your business finances – monitor, and adjust weekly.
With your budget or blueprint, you will be assessing where you are today, mapping out the exact steps you need to take to reach your stability goals, and start moving in those directions. By getting the full view of your financial picture, you’ll be able to determine and better understand the impact of each strategy mentioned below.
Look at your financial statements.
- Do you review your financials monthly?
- Is there a cash flow statement included in your monthly financial reports?
- Are you utilizing a rolling three-month cash flow forecast?
- Do you update your three-month cash flow forecast weekly?
- Have you determined the cause of your negative cash flow?
- Do you have a strategy and process to monitor your current situation?
- Are you predicting what your cash position will be for the next three months?
Your plan is the most important and necessary financial tool for reaching financial stability. One of the most important things to understand with financial planning is that it takes consistent steps and continual commitment.
Build and maintain your loyal customer relationships.
Outstanding customer service always goes hand in hand with financial management. If your customers are not satisfied, they will not stay with you. So, to build a strong customer relationship, it is necessary to understand and anticipate customers’ needs, maintain communication, and be completely transparent with the customers. Once you make your customer base, you can focus on your market research to understand their goals and achieve them with your hard work.
Leverage your current client base.
- Offer incentives to your existing customers for referrals.
- Encourage testimonials from your customers to be used on your website, advertising, and post on your social media platforms.
- Make your customers feel special through “Customer Ambassadors” or other ways to showcase your customers.
- Reduce your advertising and marketing to center on your happy customers.
Review your project/production/overhead expenses.
With every delivery, review your expenses and determine the costs per unit. Check your profit margin per unit at your current sales level. Determine if what you are selling is profitable. What are the major expense drivers? Are there cheaper alternatives?
Assess all related expenses thoroughly.
- Look at your original cost for each unit – has it changed since you priced it last?
- Are there cheaper alternatives available to begin down the cost?
- Have you updated/redesigned your product – then? Are there items that are no longer need?
- What overhead com be reduced or eliminated without impacting projects/products/services?
- Do you have continuous improvement projects to be more efficient?
- Resist making sweeping changes – take the time to focus on the causes.
- Do you talk with your team before changing, so they have input into your decision-making?
Re-evaluate your third-party contracts.
- Are you renting equipment? What would a line of credit or loan cost you monthly for the same equipment?
- Have you tried renegotiating your long-term contacts?
- Are you paying for outdated technology? – upgrade where you can and eliminate what is no longer necessary.
Relocate your office or reduce your space.
- Can you renegotiate your lease?
- Embrace remote working.
- There are savings on facility costs and office supplies, and utilities that come from renting less space.
- Do you need to have an office?
- A monthly all-hands meeting can meet in hotels and conference centers.
- Is collocating a possibility?
- Let technology work for you, and you will see substantial savings in office rental, employee-related costs, and office space-related expenses.
Time to find more affordable insurance.
- What coverage do you need?
- Shop around for your best prices.
- Consider changing your policies to higher deductibles.
- Buy bundles, not multiple insurance policies.
- Use three agents for your quotes, not just your current agent.
- Enlist insurance brokers if you are still not satisfied with your savings.
Automate administrative tasks.
- Look into automating invoicing, appointment scheduling, client follow-up, and other manual tasks.
- Go paperless – save storage, handling, and staff, while helping the planet.
- Spend a day with staff determining what manual tasks can be either eliminated or outsourced without impacting customer service or production/projects/services.
Gaining financial stability doesn’t happen overnight. Your intense desire to make your business financially stable must be an integral part of your business process. Your employees must participate at all stages of your stability strategies. As a team, you move forward towards stability and further success.
Plan! Adapt! Manage! Succeed!
#accucomp – Virtual CFO services: Our business is your success.
Feel free to reach out to book a conversation by going to https://www.accucompenterprises.com/lets-chat/.
If you prefer, email us: email@example.com.
We are all in this together!