If you want to improve the financial aspect of your business, start with smart changes that will bring you big results.
Even when a business is doing well, there’s always room for improvement. Especially if you want your company to make more money or have better cash flow.
Here are three quick ways to improve financial performance that apply to every company, big and small.
Some business owners start with the idea that their business needs to make more money to cover all expenses. But what if you reverse the order and see if you can reduce your expenses first?
Perform an evaluation of your expenses and see if there are areas where your business is spending more than necessary. You may also have expenses that were necessary at first that you no longer need to spend money on.
For example, your task management software may have just released an enhanced CRM module. Maybe you can look into dropping your CRM software if the new features meet your needs.
Other ideas? Shop around for better business insurance plans, especially if you haven't had any claims in your first few years. You can also try renegotiating your office lease. With the rise of work from home plans, landlords are eager to keep their tenants happy. See if there is a way forward that benefits both parties. Finally, you could discuss a periodic payment plan for your larger expenses to make it easier on your company’s cash flows.
Take a Look at Credit Card Processing Fees
If you bill your clients on a recurring basis, run an analysis to see what your margins look like after credit card processing fees. You might be surprised how much money is going to Stripe or Square each month.
Many card processors offer the option for accepting ACH payments, which are much cheaper to process. Consider adding a "convenience charge" onto your invoices if your clients really want to pay via credit card or, conversely, give them a discount for paying via ACH.
Make it easy for your clients to pay you, but make sure you consider credit card fees when pricing your services and calculating your margins.
Change Your Marketing Strategy
Constantly test and evaluate your marketing strategy and make sure you're getting a strong ROI. If your ads are falling flat, it might be time to cut those expenses and rethink your messaging. Paying someone to manage your social media? Make sure you have a plan for turning those followers into paying clients - if you don't, it might be worth spending your resources elsewhere.
Marketing is incredibly important for a growing business, but it is often the largest expense facing new companies. Make sure you have a marketing strategy that works for your unique business and spend your money wisely.
If you want to improve your company’s financial performance, you don’t have to do anything drastic. Small and smart changes can lead you to where you want to be.
Every business can rethink its expenses, monitor payment processing fees, and get the most out of its marketing budget. Try using these strategies for a few months and you may be pleasantly surprised by the results.