Take Stock of your Small Business Finances

Boost Your Business Credit Score

Boost Your Business Credit Score

It seems you can’t pick up a newspaper or turn on the television without hearing about the challenges business owners are facing in today’s economy. But today’s economic challenges have actually presented an opportunity for business owners like you – an opportunity to set aside some time to review the financial health of your business.

It may sound like a simple idea, but many business owners can get so involved with managing their day-to-day business responsibilities that they don’t take the time to proactively assess the financial health of the business. Or when they do, it may be too late. There are some simple steps you can take today to review the performance of your business, and ensure your business stays in line or gets back on track.

First, review your financial statements. Financial statements are essential for every business, but some business owners don’t take the time to review or even create them. There may be no better way to judge the financial health of your business. What’s your net income? Is it increasing or decreasing? What’s the trend with your expenses? Your financial statements can provide the answers to these crucial questions. These statements will also be critical if you want to apply for a business loan.

You should also analyze your sales.  How is the sales performance of your business? Are you selling less or more? If less, what are the factors that are leading to this? If you’re selling more, look closely at whom you’re selling to. This will give you a better idea of who your best customers are, and help you target a similar customer base. Your most valuable prospects can be the customers who already do business with you. Think about ways to increase the business they do with you such as loyalty programs.

Keep tabs on your competition.  How does your business look relative to its competitors? Do you have the same number of competitors or are they growing? Determine what makes your business unique and then focus your advertising around that.

Make sure to market your business. Many business owners make the mistake of cutting back on marketing and sales in challenging times. During times such as this, it’s more important than ever to be present and active in the marketplace. Look at your current advertising and determine what’s working. If it’s word of mouth, consider offering referral programs for your customers. If it’s print advertising, consider increasing your insertions. You may also want to consider email marketing, which offers a cost-effective way to reach customers. Again, knowing who your target customer is will help you profile new prospects and target your efforts more effectively.

Consider cutting expenses.  Now is a great time to look at where you’re spending money and to find ways to reduce costs. Try to negotiate better contracts with your vendors. If you have employees, you might want to offer programs like job sharing that will give your employees flexible hours in exchange for less pay.

Finally, it is important that you talk to your banker.  If you have a business banker, make sure you stay in contact with them. If you encounter challenges or opportunities, your banker may be able to help offer expertise, and can help you connect with professionals and advisors who may be able to assist you. If you experience financial difficulty, communicate that to your banker immediately.

By taking these simple steps, you’ll put yourself and your business in a better position to weather challenging times today, and in the future.


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