You began you small business, being your own boss and having flexibility in working days and hours! You had the dream and you made it happen! So, what do you do when you find your finances are running slightly short?
You can’t give up your dream, you love what you do and all the reasons you started working for yourself have met your goals, just not the $$ are not adding up.
Many of us have heard the phase “money can’t buy happiness”, well this is true to a point. We all have moments in time as SME’s when the financial side seeps into our thoughts and sometimes, unfortunately it can make or break us and our dream. There are many options to avoid this happening and many ways to avoid it.
BE REALISTIC & HONEST
Weather you are in your early days or you have been operating for some time. You need to have realistic and honest figures to guide you through each period of your business. This is during times of growth and, sometimes more so in times of hardship.
Without getting into the nitty gritty of the finances; How short are you from meeting your financial commitments? Are there places you can cut back expenses? What else can you add to your business to make up the shortfall?
CUTTING BACK EXPENSES
Take a good look across your account/s. Are you subscribed to things you don’t need? Are there transactions reoccurring that you forgot about?
Sometimes as humans we fall into the little traps of needing things at certain points of our business that we use and then sometimes we stop using. Statistics show that most average humans have at least 4 subscriptions and up to $100 per month in reoccurring transactions that could be cancelled.
Nice to have transactions are common traps for SME’s; are we going out for coffee too much, paying for lunch when we could bring something from home, or worse, uber eats, wow, this one is a crazy trap these days to fall into. But only you can weigh in on these types of costs, if ordering meals to keep working to gain more funds can work well for SME’s. If you can earn $50 during the time it would take to prepare the meal and the meal costs you $25, this obviously works.
Another trap I have personally seen is working from a paid temporary space when we don’t need to. Spared working spaces are expensive and can certainly benefit for some other reasons, networking and being more productive with the cost associated, mentally sometimes we just need a change of scenery for our work focus. Depending on your industry and your business set-up, shared working spaces can work wonders for keeping your overheads down, going to a temp office once a week vs paying weekly rent, but do assess your frequency and consider an actual office space of your own if you frequent these places more often than not, you will find a commercial space will be cheaper.
EXPANDING YOUR BUSINESS
Such a broad topic and certainly depends on your business, what you currently offer, are you selling products or offering services, both have room to expand.
Think about what you currently offer, what goes with it that you can also embrace under your brand?
If your service base is lashes, what about eye brown waxing, shaping, threading or tinting.
If you offer landscaping, do you also have bread and butter service like lawn mowing or weed removal.
If you repair computers, do you also sell new computer systems, or home networking, computer software sales or basic computer solutions for a start up? Eg antivirus
Don’t forget another old saying “you get more bees with honey”. Again, without going into the finer details of marketing and the whole social media space but do think about your market position.
Are you on social media? Do you update your content? How do people find you?
Word of mouth is still the best form to this day, but in times like this and hopefully before its too late, its time to get out there and create yourself online.
Get your current clients to follow you and endorse you with testimonials, give them a small discount for doing so if you must. Referral programs also work well to help expand your clientele and drive more business to you. If you are in a service based business and have a few good clients, ask them if they need anything else done within or just outside your field, you will be surprized how many will say yes, or even say no, but then they know someone else who could use you and give you an intro to them. It can really be that easy.
YOUR TIME MANAGEMENT
This is another aspect to assess within yourself and your business. Are you working enough hours? Can you fit in another client or be doing something else to improve the business finances?
Depending on your personal life, family, exercise regime, work/life balance you need to assess this and sometimes we need to sacrifice some “nice to haves” to expand our hours and time commitment to enable our business and finances to flourish.
SHARING SOME STORIES
Recently I was chatting with a self-employed cabinet maker. His idea of a full-on week was starting at 9am and knocking off at 4pm, 4 days per week and he was complaining about not having enough time to get all the work done. Granted he did do quoting and invoicing of an evening, but it baffled me about his focus when he also confessed, he was struggling financially. This guy had been in business for 15 years and had always experienced financial struggles. When discussing the finer details, he didn’t know what he made vs what everything cost. He rented a shed for his workshop of equipment and tools. He swiped funds out of the business as needed instead of allocating himself a wage. Sadly, he decided to close his business when he found out he was not covering expenses and a wage for his efforts.
Another SME I came across was struggling with their focus, working in a home office with small children and looking for time management solutions of their constantly interrupted schedule. They had other self-employed team members and needed to become the boss and set deadlines for work and implement systems for time sheets and cashflow functions. This SME ended up working 1 day per week in a shared working space and found they managed double the work load there than at home over a much longer day. To keep their budget in check they then went to a local café another 2 half days per week to keep powering forward without the shared office expenses. The business implemented a no time sheet, no pay system for all to follow, and they also started using tools to benefit deadlines and workflows across all team members.
No matter what your business, there are answers, you just need to find them! You need to be prepared to put in the effort to get the reward and above and beyond all else diversifying can lead to greater success and keeping your dream alive!
Brought to you from the team at BizNation