We are currently in a recession which could potentially turn into a depression. We have higher interest rates, supply chain challenges, labor shortages, inflation, and other serious challenges that each and every business owner has to contend with. As tough as a situation is, we need to view it as an opportunity. The entrepreneurs that keep moving forward will have much larger and profitable businesses with less competition. Let’s go into how to bulletproof your business!
HOW TO BULLETPROOF YOUR BUSINESS WITH THE PILLARS OF FINANCE
1st thing I would recommend is having the 4 Pillars of Finance as strong as possible.
Keeping your Credit as high as possible. Have strong cash flow and consistent profitability. This will allow you to borrow funds for growth at the best rate and terms possible. This is extremely important as we enter more challenging times.
Having cash on hand. In challenging times cash is king and credit is queen. I usually suggest keeping 5-10% of your monthly revenue in your business bank account at all times. In uncertain times I suggest keeping as much as possible. If you have excess cash find something or somewhere you can keep it to make a SAFE return on it. This will help you maintain purchasing power since we are dealing with inflation. Consider an SBA loan to increase your cash position. An SBA Loan will be 10 years and have a reasonable interest rate. This will give you the reserves on hand over the next 2-3 years.
Have access to cash. Every single business should have a line of credit set up. This gives you flexibility and access to cash whenever you need it. You only pay on what you draw on so you can rest easier knowing you have access to financing to take advantage of opportunities or in case of emergencies.
Look for partnerships that benefit both parties and their clients. This is a great way to lower your cost of acquisition and reach a new group of clients without spending more money on marketing. When looking for potential partnerships, look for companies that share your core values and serve a similar client base. When you reach out to these companies make sure it’s an even value exchange. The best partnerships are when each party wins and wins big!
Look to cut non essential costs. There are specific companies that specialize in reducing/eliminating costs. This will help you run a leaner and more profitable business. Most businesses pay subscriptions that they don’t use. Go through what’s necessary and see where you can pick up savings. We have found that most of our clients save substantial amounts of money switching to 0 cost payment processing.
RECESSION BONUS
Client retention is paramount in hard times. Your clients have limited funds and unless you over deliver and create an exceptional experience you will have to fight for new clients through marketing spend. By making sure each client is thrilled you will ensure they come back and they speak highly about your business. The best marketing you can have is word of mouth. Keep your clients happy and let them be part of your marketing.
If you can implement these changes into your business you will have a leg up on all of your competition. Don’t wait, start today!
If you are interested in working with a credible company that specializes in helping businesses grow, Integrated Business Financing is offering a free review. Please go to https://info.integratedbusinessfinancing.com/free-business-review