There may be signs of an economic recovery ahead, but many small businesses are still feeling the effects of an uncertain economy. In times like these, business growth often takes a back seat to just getting by. Indeed, according to The Hartford's 2012 Small Business Success Study, many business owners have put off plans to hire or expand in wait of better days ahead.
It doesn't have to be that way. Growth may be possible even in the worst of economies. Down times can also be good times for making positive shifts that will benefit your business later. These 10 tips can help you position your business for future success.
1. Refine your business plan.
This is a good time to dust off your business plan and adjust your strategies to better align with the current financial climate. Take a fresh look at your business' value proposition. Research your competitors and talk to your customers. Make a thorough inventory of your strengths, weaknesses, opportunities and threats (a "SWOT" analysis). Use your findings to update your business plan and set a renewed course for achieving your goals.
2. Prioritize your expenses.
Review your expenses and cut what you can. Keep and even expand programs that foster business growth, such as those focused on marketing and business development. Eliminate expenses that aren't business critical or don't yield a return. Be sure to avoid making cuts that expose you to risk, though. Insurance, for example, is an item you may be tempted to drop, but it can be a business lifesaver should the unexpected occur.
3. Improve your cash flow.
The basic principle here is to encourage payments as soon as possible while delaying outlays of cash as long as possible. This translates to simple steps like invoicing immediately and holding off on making payments until they're due. Take advantage of payroll-based billing options when you can. For instance, businesses with The Hartford's workers' comp coverage can pay their premiums based on actual payroll, eliminating the need for a large down payment. Also consider higher deductibles in exchange for lower premiums.
4. Prospect for new clients.
Prospecting can be challenging, but if you bring your expertise or service to where your potential customers are, it may be easier than you think. Join their business associations, attend local and regional trade shows, and offer to speak at events. Start a newsletter or write articles for industry publications. Just get your name consistently in front of your prospects. By demonstrating your expertise and projecting professional polish, you can set yourself apart.
5. Strengthen relationships with existing customers.
Make customer retention a key part of your strategy. Keep your customers happy. Find ways to add value to your products and services, and stay in touch – by phone, mail or email, even a personal visit — to keep your brand top of mind.
6. Build your online presence.
A website is an economical way to market your business and offers broad visibility to an ever-growing number of potential customers. Polish up your site — for visual appeal and with solid information about your products and services. Be a presence on social media such as Facebook and LinkedIn, even start a blog. You don't need to do it all yourself. An Internet professional can provide the services you need for an investment that can quickly pay off.
7. Take stock of your internal operations.
There's always room to streamline processes and bring new efficiencies to any business operation. Take a step back and look for opportunities to improve — from work streams to new tools and software. Tap into your employees for their perspectives and ideas.
8. Take care of your employees.
Let your employees know they are valued — with benefits as well as training opportunities that help them build new skills and bring new value to your organization. Be honest about your business' finances and how your employees may be affected. If you're able to retain them when times are tough and unemployment is high, you'll be rewarded with a loyal and engaged workforce when the economy turns around.
9. Plan for an emergency.
For businesses, advance disaster planning can make the difference between staying in business and losing everything. Planning ahead is one of the easiest ways to help ensure your business survives and recovers from a disaster. Make sure you have an emergency plan as well as one for the continuity of your business in the aftermath. Learn more about catastrophe planning.
10. Protect your investment.
As your business evolves, your insurance needs may, too. Your agent can review your operations, help assess your needs and discuss solutions to help mitigate them, including protection against fire, theft, lawsuits, business interruption, data breach and more. Explore small business insurance from The Hartford, and check out these Top 5 Tips (pdf) for additional insight on how you can protect your assets as you pursue new opportunities.