Few things are as satisfying as owning your own small business. The flexibility it offers and the ability to control one’s income are huge rewards. But with the rewards come the challenges and trying to grow a small business can be a huge endeavor indeed. However, with a few financial tips, any small business can expand exponentially.
Going from small numbers to big ones means, in no uncertain terms, MONEY. Having more money to hire more and qualified people, increase marketing budgets, and expand are always a challenge, but just about every small business can fund much needed resources simply by maximizing their current income and minimizing their current expenses.
Below are 5 ways in which small businesses can achieve growth quickly by more effectively managing their in-house systems:
- Simplify your accounting-While ACCOUNTING is not likely any business owner’s favorite word, it is an incredibly vital one and the place all businesses should start when looking for growth. Thankfully, current software applications allow business owners to manage all their accounting needs in house and they can often handle the task without the need for an outside firm or even hiring an employee to focus on the tasks. Everything from creating a payroll system, managing quarterly taxes, tracking expenses, and managing how the business is paid by clients can be handled by easy to use software. Much of this software can be purchased via monthly service fees which are miniscule compared to just a few years ago; a fact that helps make this task that much easier. Ensuring that your accounting processes are simplified, regularly updated, and affordable is step #1.
- Know your sales numbers-The lifeblood of any business is the sales. Knowing detailed sales statistics including seasonal trends, customer sales profiles, and noting and changes is crucial to staying on top of what’s coming in. Know your sales numbers and have plans in place as to how to increase them over time.
- Shrink what you give away-Another area of concern is the ongoing expenses required to run the small business. A simple audit of all outgoing expenses can often save huge sums of money by negotiating rates with existing vendors or choosing to purchase from alternate providers. This process can include reviewing the internet fee, phone bills, down to even the cost of printer ink. Look at every dollar spent monthly for and go over each area of expense with the goal of making that number smaller. With each dollar you save, your business grows that much stronger.
- Streamline your HR activities-Human capital makes the money happen, but that doesn’t mean your HR department has to be a huge behemoth to get the job done. HR software available today can also manage every aspect of human resources and some can even do so with the help of Artificial Intelligent enhancements to make things such as regular reviews and hiring new talent that much easier (and more affordable!) Taking some time to familiarize yourself with such advancements can pay huge dividends in the amount of time and money saved in managing ongoing human resources duties.
- Stay on top of your balance and P&L statements-A balance sheet tells the tale of the NET WORTH of a business. It takes into account income, assets, potential equity, and any existing liabilities (debts) the business has. A P&L statement or PROFIT & LOSS statement is a line by line breakdown of all the incoming & outgoing finances a business has or had for a particular period of time. Staying on top of each of these is also a great way to help grow your business as it will make you aware of what the business is worth and allow you to see trends at a glance as they pertain to how financially sound the business really is. One great way to help make that Net Worth number larger is by opening a small business 401k. This financially sound, but often overlooked technique is a great way to maximize the use of incoming profit and gradually grow your business from a small one to a big one over time with very little effort.
While many business owners simply look to increase revenue to finance future growth, utilizing the 5 steps above, you can dramatically change your small business’s financial portfolio and increase its value without making 1 additional sale. Take some time, dig into your business, and begin growing it from within with these 5 simple steps. Good luck on your small business growth!