One of the biggest challenges that first-time business owners face, is learning the basics of running a business on the fly and this, also, entails improving the financial stability of the business.
This is part and parcel of what increases the relevance and stability of the business.
Being a business owner does not imply that, you suddenly develop the technical know-how, or, expertise, in running smooth finance, or, accounting of your business.
The survival of business needs financial stability and if this is not met, the purpose of the business is not complete.
How will a business grow and survive, if, financially, it is doing badly, with no sign of improvement?
The steady inflow of income, sometimes, does not mean that the business is stable, as the better part of such income, may have been eroded by huge expenses.
Stability engenders longevity and the ability to stand steadfastly, against challenges, like unplanned resignation of a key employee, decrease in the workforce, decrease in sales, loss of clients, or, lack of capital, etc.
Below are 5 strategic principles, which will boost financial stability.
Periodic review of production and overhead cost: Check the profit margin per unit at your current sales level and then, calculate the profit margins, based on your lower sales level, so that, you can understand, at what sales volume, you are not profitable.
Carry out a periodic review on the production expenses and determine the costs per unit of product.
Payment Tracking: Sometimes, it can be incredibly hard, keeping track of all the outflow and inflow of cash, but through digital payment, you can perfectly keep track and manage how money entered and how it is spent.
Better still, hire a very good Accountant to do the job for you.
Finding cheaper alternatives for publicity: Nowadays, you do not have to spend much, when it comes to publicizing your business.
The internet and technology, has made this, so easy and cheaper.
With social media, you can reach out to billions of people around the world, within minutes.
Review your charges and increase it: Sometimes, you have to look at your charges and check, if it is still relevant or outdated.
If it is outdated, review it upward accordingly, but you should be careful, when doing this, as it may not bode well with some clients and customers and they may seek to check out other alternatives, thus, making you end up losing them to your competitors.
Competent and dedicated workers: When you have dedicated workers that know what they are doing, this means that they are justifying the salaries they are being paid and you will be spending little or nothing on having to make good, what they would have done wrong if they were not competent and dedicated.
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