Helping your company thrive during hard economic times requires fast decision-making and ongoing tweaks to business operations. The more organized you are with your firm’s different facets, the more likely you’ll turn a profit regularly.
The Small Business Administration estimates there are 31.7 million small businesses in the United States employing 60.6 million people, or 47.1% of workers, in the U.S. Every year, tens of thousands of new businesses start, and just as many close their doors forever.
The past year has been challenging for most companies as everyone scrambled to adapt to the pandemic and consumers’ new shopping habits. Unless you are an essential business, you may feel the need to streamline things. Looking at the four main areas of business operation will allow you to reduce wasteful spending and turn a higher profit:
Technology and Equipment
Every business has equipment relative to their industry and technological requirements. Even if you sell cut wood products and set up at the local flea market, you likely use some technology to track sales and market your wares.
Think about the level of equipment you need. If you run a design agency, you’ll need more advanced machines, capable of running taxing programs such as Adobe Photoshop. On the other hand, if you only use the computer to input sales or customer data, you’ll get by with a simple machine.
Make sure you have the correct power sources and cables to set up a workable office area. In companies with equipment for multiple workers, the setup becomes extremely important. You don’t want people tripping over wires or extension cords. Understand the different types of power supplies and choose one that works for your operations.
Look at the latest technological innovations and choose the ones that best help sell your product or service. For example, if you run a real estate company, a virtual reality walk-through helps an out-of-state customer feel as though they are right in the room.
Recent advances in augmented reality (AR) allow users to see how something looks in their home or on their person before buying it. Develop your own app that shows off your product’s features.
Data Storage and Protection
According to IBM and Ponemon Institute, the average cost of a data breach in the U.S. is $8.64 million. Although small businesses might not hit this astronomical number, a loss of data or a hacker getting your customers’ private information can send your business into a downward spiral.
Protect your files behind firewalls. Train employees to not give out passwords, and change them regularly. Invest in top-notch security to avoid any potential cyberattacks.
How you present your brand to the world can make a big difference in your sales. This may be one of the most important operational aspects of any firm.
If you don’t already have a marketing schedule for the year, it’s a good idea to create one. Planning your posts ensures you spread the word about new products and special sales and hit the high notes on holidays.
Your marketing team is the face of your company. For solopreneur businesses, you may be the entire marketing, sales and management team. Look for contract employees who can come along and fill the gaps as needed.
With more people working from home, you should be able to find marketing gurus who will work on a contract basis. Make sure you give them regular work so you don’t lose them to larger companies, but only if it fits within your budget.
3. Human Resources
Your company is only as good as the people you hire. Look for ways to entice the brightest and best to work for you, such as flexible time off and work-from-home options.
Gallup’s State of the American Workplace report collected data from 195,600 U.S. employees and insight from leading companies. They found a mere 33% of employees feel engaged at work. Gallup points to the fact that only 12% of employees feel their company does a good job with onboarding. This impacts the employer-employee relationship, leading to dissatisfaction.
If you want loyal staff who feel engaged and valued, the new-hire onboarding experience is crucial. It should be helpful and personalized to each role within the company.
When you do lose an employee, take time to conduct an exit interview and uncover why they’re leaving. While you might not be able to compete with the higher wages of some big organizations, you may need to make some changes at a management level if your former workers say there aren’t opportunities for growth or they feel unheard.
One of the biggest challenges for small companies is cash flow. If your business experiences a money crunch at any time, it’s time to look at what specific operational expenses you pay for and how you might reduce them.
Use Tracking Software
If you don’t already have accounting software you love, now is a great time to invest in some. Many services are now cloud-based, so you can access them from anywhere at any time. Don’t wait until the week before tax season to input your receipts. Take a careful account of revenue and expenses at least monthly.
Look for wasteful spending. Do you really need to use coffee pods when regular coffee filters are much cheaper? Is the electric bill a bit high from leaving the lights on? Do you have a few vendors charging you high shipping fees? Cut the fat anywhere you can. Even a few dollars here and there can add up over time.
Pay attention to your inventory. Are there products sitting in your warehouse for months on end? Team up with the sales department and offer a special to move these goods out and make room for new items. By doing this, you’ll recoup some of your costs in buying the items.
Angel investors, business loans and fundraising can also help you get through lean times. Most businesses that make it past the five-year mark can overcome cash flow hurdles, as they’ve experienced them before.
Audit Your Business
Don’t be afraid to bring in a third party to take a careful look at your business from the bottom up. An audit helps identify weak areas and gives you ideas for improving operations. Sometimes you are too close to the brand as the owner. You may need someone without an emotional investment to explain what needs improving and help you start the process.