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Explore The Possibility Of Making Your Business Grow With These 3 Amazing Tips

Most people think that small businesses do not have a chance to grow when their budget is very limited. But this statement does not hold importance because if any small business focuses well on creating a strong value proposition for the customers, then the road to success for that small business will be paved with gold. If you are a small business owner and wish to make your business venture grow, here are some of the expert tips that you can follow in order to turn your dreams into a reality.

Setting Up A New Shop

It is perfectly understandable that small business owners do not have adequate capital to set up a new store. But the reason why this idea has been mentioned in the beginning is to make people understand that starting up a new shop is not the only way you can make your business grow.

Expansion in terms of the physical location of where the business is set up is no doubt an important factor that contributes to the growth of a business venture but is not the only option. In order to fulfill the dream of expanding your business location wise, it is important that you divide your profit margin into two; one for your monthly expenses and the other set aside for the down payment of setting up a new shop.

Obtaining A License For Your Product

Small business owners usually feel that product licensing is not important since the business that they are running is on a small scale but this isn’t the right approach if you wish to expand your business in the future. Think of having your product licensed as a low cost business growth medium especially if your product falls under the branded product or service product category.

The reason why this is an important step for small businesses is that if lady luck shines down on you and your product is highly successful, you might actually receive royalties and upfront amounts for consistent sales or use of your product or brand’s name. This is considered a highly effective business growth option that does not cost much but mitigates your risk. Plus, it is a much better option for those businessmen who are not looking to start a company of their own in order to sell their product.

Use The Diversification Strategy

Another efficient method you can put to use is the diversification strategy to help your business venture grow. The concept of the diversification strategy is quite simple. You can start offering complementary services or products on the side. This will not only help in generating extra revenue but also increase your product line which will become a foundation for other products to follow in the future.

If this idea doesn’t seem plausible to you, you can start importing other’s products or start exporting yours in order to reach out to more customers. Experts always believe that the diversification strategy is a brilliant idea that can make even humble beginnings turn into profitable business ventures in no time.

Small business owners who find difficulty in book keeping or face accounting related issues in their business can hire a CPA or CFO on a daily, monthly or yearly contract basis through SK Financial CPA.

How To Manage Debtors To Keep The Cash Flow Positive

Cash flow management is one of the most important aspects of a business that should never be taken for granted. If the cash flow management of a business is not smooth, it can face numerous financial and reputation-based issues, which just become more complex as the time goes by.

Big businesses that supply goods to their customers on credit mostly go through numerous debtor management issues, which can lead to financial issues for the business and a negative business cash flow.

Following are some tips for such businesses to effectively manage their debtors:

1- Adjust Accordingly

No client is the same. A business has a set of old clients that are trustworthy and new clients who cannot be trusted so much. Therefore, a business should keep the credit allowance and credit terms based on the type of customer it is dealing with.

Moreover, important information of all the clients asking for credit terms, whether they are new or old clients, should be sought which includes credit score, bank history, bank terms and financial transactions. All of this information should be evaluated before deciding the credit terms or thinking about allowing credit to the clients. If the financial information provided by the client seems too risky, the business can run a credit check on the client, just to be safe.

2- Make Everything Clear

While dealing with finances, businesses should not leave a room for doubt for the client. All the conditions should be well-communicated to avoid any future problems. Make sure that you give a precise due date of payment to the clients and stress it over so that it is taken very seriously.

If the payment is scheduled to be received after a few months, bi-monthly reminders should be sent to the client to assure that a thorough follow-up is in practice. Not notifying the client for a few months and then straight away calling them up for payment is a major mistake that most businesses make which results in delayed payments.

All the credit terms should also be well-understood by the client so that future scrutiny can be avoided.

3- Provide Numerous Methods

Businesses that provide their customers a vast range of payment options are more likely to get paid on time as it increases the ease of payment. Methods such as online banking and internet payment methods (for small payments) should be set-up so that the client can make the payment with absolute ease.

4- Installments

 Financial experts suggest that huge payments should be broken down into installments to ensure that timely payments are received and that the clients are not intimidated with paying a huge amount all in one go. This works best in keeping the cash flow positive and also decreases the financial risk in case the client defaults.

5- Default Cases

In cases of big payments, there is a higher chance that the debtors default in which a business can choose to hire a debt collection agency, if all the negotiations fail.

Management Functions That Will Keep Your Business on Track

What is management? To understand management, firstly, the true meaning of management must be understood. A business combines several functions at small and large scales to execute a common goal through strategies that are not ideal, but effective for the success of the business in the long term.

Several business functions include:

  • Utilizing Resources
  • Managing Resources
  • Coordinating Activities
  • Selling Products
  • Offering Services
  • Creating Jobs
  • Preparing Budgets, Forecasts and Financial Accounting
  • Payroll Activities
  • Human Resource Activities

All the above functions of the business need a force to bind them together. This binding force of the functions of the business is known as management. Management is commonly explained as an art that coordinates people’s efforts to achieve goals and aims of a business using the resources available efficiently.

Management brings discipline to a business environment. It combines the functions of organizing, planning, controlling, formulating policies and steering a firm’s resources in the right direction to achieve the policy’s objectives.

One of the most important management functions these days is organizational development (OD). With a fast change in technology, people’s intellect, and the world moving towards scarce resources, an organization must properly organize itself to use every resource to its benefit rather than wasting it.

Organizational development takes notice of the changing management needs of a business and tries to cope with them and ensuring that the needs are met immediately. Organizational development is a business process that involves efforts to change people’s attitudes, relationship styles, belief systems etc. for collective benefit of the employees and the organization.

Organizational development was previously categorized as HR function but recently the relative importance of this function has made a separately recognized function. OD is regarded as a strategic business management function that executes various roles in a business.

  • It ensures a balanced organizational climate.

The OD management function helps structuralize the organization and educating the employees with the art of multi-tasking. It helps reduce the number of people or employees by using technology making the production or work process more efficient.It encourages teamwork and train managers to treat the business as their own asset adopting appropriate leadership styles at all levels. Periodic training and effective communication are some of the other roles of the OD function.

  • Installation of PMS – Performance Management Systems

This involves setting clear parameters for performance through job targets, policies and procedures and making these performance levels known. Informing about inadequate performance, warnings and ensuring supply of essential resources is key to efficiency.

  • Minding the cash outflow by:

o   ensuring resource accountability, reviewing and monitoring the pattern of resource utilization and eliminating wastage

o   use of latest technology to execute tasks that prove cost and energy efficient

o   developing the thinking of managers and executives to adopt cost efficient  ways of achieving the goal

o   Identifying employees that contribute to increasing costs and monitor their attitudes and behavior during work hours, and counseling them as a cost reduction initiative

SK Financials provides with a complete guide for startups and growing businesses on how to survive the tight competition. For more info, visit: www.skfinancial.com