Are you looking at the calendar and wondering how half of the year has flown by?
Maybe you’re considering how you are going to make up for a slow quarter?
I think many small business owners are because, let’s be honest, it’s been a little crazy out there.
If you are looking to pump up the volume of your sales and increase profitability, I thought it would be helpful to walk you through constraints that could be slowing down the growth of your small business.
No strategic plan or vision
The hard truth “If you fail to plan, you are planning to fail” is generally attributed to Benjamin Franklin, and is a common refrain in the entrepreneur community. That said, many small business owners don’t write business plans, or if they did write one initially, they haven’t updated it to reflect their current business.
It is critical for your business to have a documented vision for the company, and a business plan for how you will achieve that vision, understanding that adjustments may be needed along the way.
Financial constraints
Most businesses will experience financial issues from time to time.
As one example, landing the big client, which seems like a great thing, can actually cause stress on a business as you have to staff up, pay contractors, or pay vendors to fulfill the order. And this may all have to happen before you get substantial payment from the big client.
Or, you may need a line of credit, but not have one in place. The best time to set this up is when you don’t need the money, unfortunately. Banks will be hesitant to loan money to companies in financial distress.
Also, accounts receivable factoring can be an option for certain businesses. There are different types with different terms. Understand what you are signing up for.
Cash flow management issues
Have you heard Carol Roth talk about practicing “cash flow yoga” in your small business? She says you should always try to take the cash in quickly and put it out slowly. (Watch a 90-second video for how to do this here.)
Ineffective marketing
Is your marketing working? Do you even know? Have you looked at your analytics?
It’s important to periodically evaluate what is getting you results and what is not. Throwing spaghetti at the wall with social media posts and paid ads may not be getting you the leads or sales you need. Know what is working and what is not working and adjust accordingly.
If you need help creating a business marketing strategy, I highly recommend this book by marketing expert, Susan Tyson.
Difficulty retaining clients
Once you have a customer or client, do you take care of them? Have you considered their experience of your product or service? Are they happy? Would they refer it to a friend?
Have you considered how you can maximize the lifetime value of a client? It is much easier and cheaper to sell more to people who already know, like, and trust you than to get a new client to buy for the first time.
This is a place you definitely want to look if you need to improve profitability quickly.
Lack of leadership
Do you have the right leadership in place? Do you have a committed and knowledgeable executive team?
Are managers trained on your business and also on the right ways to manage people? One bad manager can wreak havoc on a small business.
I’ve given you a lot to think about here. I hope I have identified some areas where you could improve so your business achieves its goals.
Stay tuned for Part 2.
