Managing a small business can be difficult and profit margins are typically razor-thin. Even the slightest financial hardships can put your business in jeopardy. Although you’re most certainly destined to deal with bumps in the road along the way, it is possible to persevere through tough financial times with smart strategies. Here are some ways that you can get your small business through financial hardship.
Cut Costs Where You Can
One of the first things you should address during tough times is financial waste. Is there room in the budget where you can cut costs without negatively impacting your business? The answer is almost always yes. This can mean cutting unnecessary spending, trying to find better prices on supplies/equipment, or reevaluating the cost of financial services.
The latter is particularly useful if you are pouring funds from your personal account into your small business account when both use different banks. This type of transaction between two bank accounts is called an ACH transfer and typically ranges from $3-10 per transaction. A personal savings account without transfer fees can save you hundreds, if not thousands, of dollars in the long haul.
In general, it’s a smart business practice to routinely check your budget for waste, as it can often go unnoticed. In good times you may not notice or feel the need, but it should be your first act during hardship.
Try Something New
Offering a new product or testing a different marketing campaign could be just what your small business needs to excite your customer base and attract new revenue. However, this also means that you may need to issue additional spending. In the spirit of cutting costs, you’ll want to utilize some cost-effective strategies to promote a product launch.
Social media can be a cheap, yet effective way to market a product launch. Free product giveaways can go viral and create organic conversations about your brand.
These platforms also allow you to connect with a large audience to sustain and build your audience. Through creating content that is relevant, you can strengthen positive relationships and traffic to your business—all for the cost of production on something you plan on selling plenty of.
Be Prepared for Overspending
In some cases, such as the production of a new product or marketing campaign, you may need to spend your way out of a tough financial time. Your business will hopefully rebound and return to profiting with manageable growth, however, you may still need to deal with lingering problems. Luckily, if you foresee your business acquiring debt, you will have more time to prepare a debt repayment strategy.
Once your profit margin improves and your small business is through the toughest times of your financial difficulties, you can begin to initiate your debt strategy. Refinancing loans and prioritizing debts are just two of several methods for handling small business debt. The most important thing is to do your research beforehand and consult experts if need be. Whichever route you choose to get your small business out of debt, having a clear and concise plan in place will improve your chances of success.