Times are tough. The economy is down and many small businesses are finding it very difficult to keep going. Service oriented companies have it a bit easier. They don't have an inventory to stock, track and keep current. However, all companies must evaluate their situation. Is your company fit enough to survive?
Take a close, hard look at your business. Be realistic and honest when you answer the following questions. Anything less and you are cheating yourself and jeopardizing your business.
1) Do you have enough capital to survive the next three, six, twelve months? Given your current rate of spending, will your revenue keep you going? You must also take into consideration potential increases in expenses (i.e. inflation), equipment failure and taxes. If you are on the edge, it is in your best interest and that of your company to seek a line of credit or a loan. It is best to have the money waiting when you need it rather than having to look for it when the collection agency is at your door.
2) Are you planning for the future? Not five years down the road but next week, next month, three months from now you get the idea. You know where you want the company to be. Now you need the road map to get you there. It's critical to the survival of your business to have a comprehensive plan that addresses finances, marketing, growth and all the details.
3) Is your business, approach, product or service unique? Have you found a niche? What is it and who is your target? Many companies spend thousands of dollars advertising and targeting a mass of people. Unfortunately, most people that see the ads don't need or want the product or service. Highly targeted marketing is a must for survival. Make sure you are getting the biggest bang for your buck.
4) Do you know why your potential customers or clients should buy from you? If you don't know, your customer or client certainly doesn't know. Your marketing dollars are better spent if you can tell a customer why they must buy from you today. If you don't know or can't tell someone in a sentence or two save your money until you can.
5) Are you flexible? Are you doing things the way you have always done them? Are you using the same vendors? Money can be saved be reevaluating your vendor relationships. Ask for discounts if you pay before the invoice is due. Streamline your processes to save time and money. If a product or service is costly and doesn't produce a good return, get rid of it.
6) Do you go one step further? Do you provide top quality customer service? If a customer or client doesn't feel appreciated and special he/she will not return. It is much cheaper to keep a current client than to find a new one. Evaluate your customer service policies and, procedures written and unwritten. Is this the way you want to be treated? If not, changes are in order.
7) Do you outsource to the professionals? You can't be all things to all people. It is your best interest to have a lawyer and an accountant at your fingertips. The law and the IRS can do a good deal of financial damage to your business if things aren't handled correctly.
Every business owner will tell you they have poured their heart, soul and every spare dime they have into the business to make it work. Make sure your dream will survive. Take the time to evaluate your business.
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Quick Tip
If the interest rate on your credit card is more than 12 percent, call them and ask for a lower rate. In many cases, if you tell them you are thinking of switching to another company because of the rate they will reduce it. The same goes for telephone companies. Call them and request a lower per minute long distance rate. Little bits here and there add up to big dollars at the end of the year.
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