Creating cash flow opportunities to build your business can be a challenge for businesses starting…
Business Finance Tips for Success in 2019
Most experts agree that we should brace ourselves for a slowing economy in 2019.
But that doesn’t necessarily mean you should expect to end the year in the red. Knowing that we might be facing an economic slowdown, it’s more important than ever to make wise business decisions.
Whether you’re planning to consolidate your position or expand your business in 2019, follow these six expert business finance tips and you’re likely to come out on top:
1. Create a contingency plan.
Before you charge full-steam ahead into 2019, take a close look at your finances. Review your performance ratios for 2018, and prepare cash flow projections for the coming year.
It may be time to re-evaluate your contingency plan (or create one if you don’t already have one). What will you do in the event that sales slow or interest rates rise? Will you still be able to pay your business’s bills when they fall due?
It may seem like I’m starting off this list with doom and gloom, but creating a contingency plan means you can make smart decisions to set yourself up for mammoth success instead of disaster.
For example, you might be able to:
- Start cutting down on costs now, to free up some cash flow for unexpected expenses.
- Tighten your control on your customers’ unpaid accounts.
- Set up a credit facility as a back-up in case working capital is tight.
2. Meet your customers where they are.
Before you invest in any new ideas, think about how you can rise to meet the current economic climate and make the most out of your current client base.
With the idea that your clients and potential clients may start tightening their purse strings, how can you make your product or service more appealing? Think about ways your product can save them money, or why they might need your product or service regardless of cost.
Once you start brainstorming, you may come up with new products and/or marketing ideas for the year that will set your business up for immense growth.
When you think about the large businesses of today, it’s obvious that they’ve shifted with the times. And if you want your business to endure any conditions, plan ahead and be flexible. Try to think like your customer and anticipate what they may want as this year progresses.
3. Make calculated hiring decisions.
Before you bring on any new hires, think about how you expect each new employee to increase your business’s bottom line. This may not be the year to expand administrative help if it’s not going to bring cash back into the business. On the other hand, it may be the perfect time, if your key players are overworked and overtaxed.
After all, you’ll need these people to be thinking and working creatively to help grow your business in 2019.
4. Talk to your customers.
In a year when you may want to act with some level of caution, listen to the experts before investing in any big ideas. And the number one expert on your customers is – your customers!
Talk to them before you make any major product or service changes. You can run ideas by them through online surveys, email questionnaires, on social media or via in-person focus groups. Surveying your customers may seem like an extra step, but it can help you avoid potentially expensive mistakes.
You have what you think is an epic new product idea. You survey your customers through an online poll to test the waters. Their response? “Meh.”
At this point, you’ve only lost the time spent polling them. You can go back to the drawing board and retool your idea to create something your customers really do want and will be very happy to pay for.
5. Consider financing growth.
If you have solid ideas to help grow your business and just need the funding, it may be time to get a loan. Business financing is always a risk, but if you’re confident that your plans will help you build a more solid and successful business, that risk may worthwhile.
Bill Baker from UnsecuredBusinessLoans.com.au, a website that compares business loans for SME’s says:
“In the last few years, there has been an explosion of online business lenders who offer a wide array of financing products, for instance, ‘invoice financing’ that allows you to get paid your invoices immediately, which can eliminate slow payers.”
If your business isn’t quite ready to borrow, but you want to invest in growth in the future, you could spend this year establishing a good payment history and making your business creditworthy, so that by the time you want to apply for a loan you’re in the position to get the best possible rates on your business finance.
It’s a good idea to always consult a business finance broker or speak to your accountant.
6. Consider joining forces with your greatest competitor.
This may seem a little left-field, especially if you feel you have the upper hand. Shaveer Mirpuri from Goat Ventures, a VC company sees this happening more often. In our constant strive for innovation, you may offer a piece of technology, or an advantage, the more established company, doesn’t have.
Imagine how the larger company could distribute this to their audience and customers. Faster, and more likely, more efficiently.
It could create lasting synergies and greater financial rewards that go far beyond you trying to win alone.
Shaveer actually did a TEDx talk about it recently which is worth watching.
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
SHARE THIS ARTICLE WITH LIKE MINDED SMALL BUSINESS PEOPLE