Smart Strategies For Small Businesses To Create Stability This Year

Effective financial management is crucial for every single person, business and organisation. As the world is full of surprises and seasonal fluctuations, it’s key to stay prepared for all of these situations to maintain stability throughout the year. No matter how or what kind of business sector you are in, you are going to be faced with challenges and changes such as inflation, the holidays, changes to the economic landscape or a change in consumer preferences.

Through implementing effective strategies, you can remain stable beyond just the financial year, which in effect will help you stay competitive, enable growth and create a solid foundation for success in the future. While the short term is important when it comes to stability and growth, you will always need to think of the next 5 steps. This will set you apart from the rest and keep you stable throughout your business lifespan.

So without further ado, we have put together some of the best smart strategies supported by research for small businesses to consider when reaching for stability this year. 

Streamline Forecasting

To start things off, you will first need to analyse and put together a spreadsheet of everything that is coming in and out of the business over the previous months. How much you spend on rent, utilities, staff and other business expenses will help you accurately see your total revenue every month.

Seeing these figures is a must for every small business and is basically the only way you can track your spending. When it comes to running a physical store or an office space, there are constant expenses so it can be hard to keep track of exact figures. Therefore, if you do know what you’ve got, you can act accordingly. You will know how much you can add to growth or if you are breaking even.

Something so simple can help you change your business plan and strategies for the following month, keeping you secure and stable. If you are struggling with where to start, you could consider MYOB, which is a popular accounting software provider that makes forecasting so much easier. They offer resources and guides, so every single question might have an answer.

Trim The Fat

Once you’ve gone through the financial forecasting, you might need to trim some of the fat. A huge perk of going through all the expenses and establishing what is costing you a huge chunk of your revenue is that you can zoom into this and find ways you can save. This means research is going to be your best resource. For example, if your supplier is costing you a lot of money, you could go back and renegotiate a price or if your bills have gone up, you could look into changing your energy provider. There are always ways you can save on costs; just be sure you don’t cut the cost to the point it affects the quality of your product or service; otherwise, this could affect your cash flow and be a downward slope.

Strengthen Your Financial Future with Revenue Diversification

Putting all of your eggs in one basket is never the safest route in business with fluctuations due to seasonality and economic changes. The best way to remain stable throughout the year is to try and expand your avenues of revenue. Whether you are creating a new product line or adding a different service to the business, or even if you go as far as investing in other businesses to create some good debt as a good just-in-case solution.

There are ways for you to expand your business and experience. If you are looking for ways to expand your revenue again, you will need to spend some time researching to take the right steps forward and safeguard from any challenges.

For example, there have been a few companies that have found great success through revenue diversification, such as Ingenia Communities Group. They started in the retirement villages but thought that wasn’t enough to turn them into a success and decided to expand into other areas, such as holiday parks. This diversification, while showing it on a larger scale, is a perfect representation of why this is important.

During a slowdown in the residential market, they were able to stabilise this by exploring other sectors in the property market. While one thing might take a hit, others will thrive, so it’s down to research, timing and effort. While each business sector is different, there needs to be diversification to ensure balance.

Build a Strong Online Presence

In today’s digital world, having a strong online presence is essential and can help with engagement, traffic and sales. A website that excels in customer satisfaction, multiple social media accounts and strategies for online advertising campaigns can help attract customers year-round!

Remaining active on social media doesn’t always have to require a lot of effort. If you could dedicate a day to taking pictures, you could repost these pictures throughout the month, so while you are active on social media, you aren’t taking up endless amounts of time setting up shots just for a single post.

If you are ever confused about simple tips to get your business started online or how to take it to the next step, the Australian government offers a chance for you to connect with them on tops and tricks but also tells you some success stories to keep your mind at ease. At the end of the day, becoming famous online is a hard and sometimes lengthy process. As long as you stay true to the brand's morals and values—that’s all that matters—and have fun with it, you'll be surprised at how well things can go.

Build New Partnerships

Collaborations and partnerships could just be what your business needs to bring in not only new clientele but also boost some stability. It’s a win-win situation and a huge learning experience for a small business. For example, if you are in the wedding business and you get florists and caterers to reach out in hopes of creating a collaboration, it’s the perfect opportunity to not only cross-promote each throughout the year but potentially the entire time you are in business. It’s the same with general trade; you will always recommend someone you know, trust, and rely on their ability and therefore, these partnerships can improve the trust flow of your business while bringing in new clients.

For example, Canva, a globally recognised Australian design platform offering free graphic design tools and Office Works, a leading Australian office supplier, decided to go forward with a collaboration. The partnership itself benefited both the companies and Canva was able to gain valuable physical touchpoints and exposure to a whole new customer base. Office Works was able to offer a unique proposition to their customers, making them stand out against their competitors.

Credit Insurance

There’s one thing that can be a problem if you work in business-to-business sectors, and in some cases, business-to-consumers: it's the threat of non-payment when invoices are due. This can affect the cash flow of your business and therefore you are essentially stuck. This can create great instability, to the point where it could be your business's demise.

If you were paid on time, your business could remain stable but also have the means to grow, rather than wasting countless hours chasing clients to pay. There are ways you could guarantee paid invoices but it comes with a small cost. For example, there are standard credit insurance or export credit insurance brokers that will pay you what your clients owe minus a fee and then they take on the workload with chasing. This can be a perfect solution for any business, small or large.

Final Thoughts

When it comes to finding the right strategies for your business, it is important to tailor these strategies to your business. As these are broad statements, your own research should be the first step in stabilising your business. Therefore, seek help from others and see what markets seem competitive and any trends that could be taken advantage of.