During the start-up phase, it’s vital for a business owner to keep a close eye on the books. Running into financial trouble can crash a business long before it’s taken off. To help keep your business out of the red, keep these tips in mind:
Work from home or a shared office space
The benefit of working from home is obvious – you don’t have to rent a premises and pay the overheads that come with it in addition to your home. It’s not everyone that can work from home though, so those who want to avoid distractions at home or who prefer to have people around, can look into shared office spaces. These business hubs are popping up everywhere and provide, at the very least, a desk and chair to rent. You’ll share the space with other entrepreneurs or freelancers, which will also give you the opportunity to network.
Barter with other businesses
Business owners are often told to negotiate discounts, but bartering works just as well, if not better. During a barter you’ll offer your service in exchange for someone else’s service or product. Say, for instance, you’re a web developer who would like signage done on your car. You can then approach a signage company and offer to develop their website in exchange for a vehicle wrap. It’s a deal both businesses will benefit from.
Employ with care
Only employ people once it’s really necessary and when you can afford it. You’ll most likely find that you’ll be able to take care of admin and other menial tasks yourself in the first few months. Assess the business’s needs after four to six months to see whether an employee is needed to fill a gap. Thereafter, take it month by month, but never employ more people than is necessary.
Be a budget-conscious marketer
There are many ways to create awareness of your business without spending half of the monthly budget. You can use networking as an advertising tool and have business cards on you at all times. Invest in email marketing, run a competition or start a referral program with existing customers. Even if you have only one customer, that one customer can lead to one more.
Pay and get paid quickly
Cash flow is what keeps a business afloat, so take care of yours. Part of it is paying creditors on time, so that interest is not accrued on outstanding debts. The other part is getting paid, which is often a headache. Help debtors pay on time by issuing invoices quickly or by setting up electronic payments for them. Don’t try and sell this to them by telling why it’s good for your business – do it by telling them how it will benefit their business.
These cover all the business basics, but should make a huge difference to the bank balance at the end of the month. Continue doing business frugally until you’re out of the woods, but keep the lessons you learn as reminders for times when the cash is not flowing as freely as it should.
This advice was brought to you by Digicash in the interest of the financial health of your business.