Be tenacious, be resourceful, and make it through to the other side. Here’s my small business survival guide for keeping going through the hard times.
All businesses go through hard times – I include myself in this – and it may sound clichéd, but if you can make it through, you do come out stronger at the other side.
Here are a few lessons my own tough times have taught me.
Know what you can live without
You knew this was going to involve making cuts. My tip is to make them with great care. Figure out what you can and can’t cut without causing fatal damage or setting yourself up for long-term problems. This includes asking staff what they really need or can do without.
For example, you might find that you can quit paying for a team lunch every quarter, but find that your decision to remove the handwritten thank-you cards you include with customer orders kills your repeat business rate.
Look at cheap or ‘free’ ways to work
There’s a wonderful thing happening at the moment called ‘freemium’. It’s a business model where a company provides their basic services free, and charges for advanced functionality. As a small business, you may be able to save money by sticking to the free version.
I worked for a company that had spent big bucks on an instant messaging service and company intranet. It was great to see a business valuing its staff communications, but they could have set up a free account on Slack.
Adapt – consider revising your offering
If you’re tightening your belt, the chances are your customers will be too. So why not look again at your product or service range and see whether you could offer a no-frills version? Smaller portions, budget delivery options, less luxurious materials – there are all kinds of value propositions that will save you money as well as your customers.
Don’t let contracts roll
Suppliers often have contracts roll onto a standard tariff when your current plan comes to an end. If that happens without you noticing, you could end up landed with a year of expensive utilities when you can least afford it.
Keep an eagle eye on your contracts and set up notifications via your email calendar or smartphone. That way you have plenty of time to research what’s available and switch to a new supplier before your current term runs out.
The simplest way to get a better deal? Ask. Whether you’re buying stock, renewing a contract or striking a deal with a supplier, ask if they can give you a better deal.
The key to stress-free bartering is knowing what you’ll pay and when to walk away. If you’re willing to pay $50 but a trader tells you $75 is their absolute minimum, stick to your guns and politely end the exchange.
Cut down your payment terms
When you’re struggling, liquidity is the name of the game. A long wait for payment could starve you out of business, especially if several contracts fall within the same timeframe. To keep your cash flow healthy, consider cutting your payment terms.
Going down from 2 months to 1 month could maintain enough cash in the bank to keep you going through a tough spell.
Replace with second hand
Printer busted, couch on its last legs or staff kitchen desperate for a new coffee machine? Instead of paying out for new replacements, look at sites like Craigslist or eBay to see if you can pick up good-quality second hand ones from office clearances or store surpluses.
You may be able to cut your expenses even further with Freecycle and Trashnothing.com, where people donate their unwanted goods for free. All you need to do is go pick them up.
Want more ways to cut down on spending? Take a look at my cost-cutting hacks for small businesses post.