Effective financial management is crucial for every single person, business, and organisation. As there are often seasonal fluctuations for businesses, it’s extremely important to stay prepared for all situations to maintain your business stability throughout the year.
No matter what kind of business sector you’re in, there will be challenges such as inflation, holidays, changes to the economic landscape or changes in consumer preferences.
Through implementing effective strategies, you can remain stable beyond just the financial year, which will help you stay competitive, enable growth and create a solid foundation for success in the future.
While the short term is important when it comes to stability and growth, it’s advisable to think ahead by planning the next 5 steps. This approach can help set you apart from the rest and help maintain stability throughout your business lifespan.
In this blog post, we’ve put together some of the best strategies for small businesses to consider when aiming for stability this year.
1. Streamline Forecasting
To start, you may want to analyse and create a spreadsheet of everything that is coming in and out of the business over the previous months.
Knowing how much you spend on rent, utilities, staff, and other business expenses will help you see your total revenue every month.
Having these figures is a must for every small business and is basically the only way to track your spending accurately.
When running a physical store or an office space, there might be constant expenses so it can be difficult to keep track of exact figures.
Therefore, if you do know what you’ve got, you can act accordingly. You will know how much you can allocate to growth or if you are breaking even.
If you are struggling with where to start, you could consider different financial tools such as an accounting software provider. This tool can make forecasting so much easier and give you access to various resources and guides to better manage your business finance.
2. Trim The Fat
Once you’ve gone through the financial forecasting, you might need to trim some of the fat.
A huge perk of going through all the expenses and establishing what is costing you the most is that you can easily find ways you can save.
For example, if your supplier is costing you a lot of money, you could go back and renegotiate a price. If your bills have gone up, you could look into changing your energy provider.
There are always ways you can save on costs.
Just be sure you don’t cut costs to the point where it affects the quality of your product or service. Otherwise, this could impact your cash flow and lead to a downward spiral.
3. Strengthen Your Financial Future With Revenue Diversification
Putting all of your eggs in one basket is never the safest route in business due to seasonality and economic changes.
The best way to remain stable throughout the year is to expand your avenues for generating different streams of revenue.
There are ways for you to expand your business. They could be developing a new product line or adding an additional service to the business, or even investing in other businesses to create some good debt as a just-in-case solution.
If you are looking for ways to expand your revenue, make sure you spend some time researching to take the right steps forward and mitigate potential risks.
With revenue diversification, while one thing might take a hit, others will thrive. So, it’s down to research, timing and effort. While each industry is different, you may consider diversifying your revenue streams to ensure balance.
4. Build A Strong Online Presence
In today’s digital world, having a strong online presence is essential and can help with engagement, traffic and sales.
Having a website that excels in customer satisfaction, multiple social media accounts and robust strategies for online advertising campaigns can help attract customers year-round!
Remaining active on social media doesn’t always require a lot of effort.
If you could dedicate a day to taking photos for all your products, you could use these images on socials throughout the month.
So while you are active on social media, you aren’t taking up endless amounts of time setting up shots just for a single post.
If you are ever confused about simple tips to get your business started online or how to take it to the next step, the Australian government offers resources to help. They provide guidance on tips and tricks, as well as success stories.
At the end of the day, becoming a widely-known brand online is a hard and sometimes lengthy process. As long as you stay true to the brand’s morals and values, that’s all that matters. And have fun with it, you’ll be surprised at how well things can go.
5. Build New Partnerships
Collaborations and partnerships could be what your business needs to attract new clientele and boost stability.
It’s a win-win situation and a huge learning experience for a small businesses.
For example, if you are a wedding business and you have florists and caterers reach out for a collaboration, it’s the perfect opportunity to cross-promote each other’s services.
It’s the same with general trade. You will always recommend someone you know, trust, and rely on their ability.
Therefore, these partnerships can improve the trust of your business while bringing in new clients.
6. Mitigate Invoice Payment
One potential problem in the business-to-business sector and in some business-to-consumers cases is the threat of non-payment when invoices are due.
This can affect your business’s cash flow and lead to instability, even to the point of jeopardising your business.
If you were paid on time, your business could remain stable but also have the means to grow, rather than spending countless hours chasing clients for payment.
There are ways to guarantee paid invoices but they generally come with a small cost.
Moreover, invoice financing could be a suitable solution. It allows you to receive an amount of funding using your unpaid invoices as collateral.
So essentially, you exchange your outstanding invoices for upfront cash from a lender, who will then collect the payments from your customers.
This can be a suitable solution for any business, small or large.
Final Thoughts
When implementing these strategies for your business, it’s important to tailor them to your needs and financial situation.
Conducting your own research and understanding your business should be the first step toward achieving stability.
Then, carefully apply these strategies to create year-round stability for your business.
Author Bio: Lucy Couser is a Business Management grad student by day and an explorer of the business world through podcasts by night. Fueled by intellectual curiosity, Lucy enjoys researching the industry and crafting insightful articles when she’s not travelling the world.
