What important points to consider while expanding your small business?
A small business is not a small thing these days. It must be considered as one of the strongest weapons for improving the financial condition of the country. But there are many small businesses that do not know the right path towards success irrespective of having all the tools. There are certain things that must be kept in mind before expanding a small business. Some of them include:
- Invest in systems- A business must be powered by systems so that it can handle the multi-layered demands of expansion. A robust system consisting of software's such as CRM or powerful e-commerce software can help a business focus on the important parts of expansion and growth. One must review their current operations to see which aspects are repetitive or monotonous and make it your goal to automate or outsource as much as possible, so you can remain focused on the growth of your business.
- Homepage improvement- The homepage of your official website is most likely where all your customers land. If it’s cluttered or hard to navigate, they’ll go elsewhere. If your homepage does not show the value of your product, it’ll be turned off. Sometimes a simple change in the content or design can boost revenue tremendously.
- Focus on scalability- When you don't have enough money, time, and expertise it can be tempting to invest the time in basic solutions that don’t require a huge financial investment as well as learning them can be easy and less time taking. This will help your business in scaling the new heights of success.
- Be financially savvy- Even the most successful business needs to look at the bottom line. Always keep the money for those bad days to pay your employee when the business does not run on a good note. Make sure that your investments are on a good note to ensure you don’t end up in a tight spot later on.
- Assess your KPIs- one of the important things to check before thinking of business expansion is assessing the key performance indicators of the business. These indicators help you in understanding the exact position of your business. They also let you know whether you are financially in a good position or not, whether you are meeting your financial expectations, or earning enough profit to survive for some time or not.
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A small business needs to save money in order to be financially independent in all the bad days as well. It becomes very much important to work in such a way that it saves money in all the stages and must be cautious while spending them. Some of the money-saving tips for small businesses are:
- Negotiate with vendors- Being a small business it is our main motto to save as much money as we can. For this, we must negotiate with our vendors. As we know a small business tends to build a strong relationship with their vendors for as long as they can. So, the vendors also readily agree to lower the price as they don't wish to lose a long-lasting customer.
- Cut office expenses- Most of the businesses these days are not using their office space properly. Apart from this, there are several other things on which we spend quite a lot of money which is unnecessary. So, we must avoid doing that in order to save that money and spend on the essential things of the office or employee. Outsourcing accounting and bookkeeping services work in favor of small businesses as they can plan cost-cutting as well as choose some of the best services from the market and get them customized as per their needs. Read our blog on Benefits of Outsourcing Accounting Work To Professionals
- Keep some annual revenue in cash- It is very much important for small businesses to work towards saving 10% of the annual revenue in cash in the bank at all times. This amount will help you in aiding your business during hard times. This will help you in taking reactive decisions based on the total money you have.
- Clear all accounts payable and accounts receivable- These two are the most effective and oldest ideas for cash conservation. One must clear their accounts receivable and accounts payable by speeding up the invoicing process for conserving cash. This also keeps your terms clear with your customers as well as vendors.
- Save minimum 5% every month- It is very much important for any small business to save at least 5% of the revenue generated in the reserve of the business. This can be used during the bad days of the business or for improving the standard of the business or improving the infrastructure. This process must be automated so that you don't have to remember it and then transfer the money to the reserve account. This money should automatically get deposited into your account which you might not even be aware of.
Why is SOP important for expanding business?
A standardized set of procedures or SOP for any business irrespective of size can help in reducing the time taken for carrying out any kind of operations, increases the productivity of the team, reduces the chance of making any kind of error or reliability on anybody, and improves the compliance of the industry. When all these things sit in a perfect position the profitability of the firm increases and provides a defined path for the solution creation, and protects employees in a healthy and safe environment. Some of the other benefits of SOP for small businesses include:
- Quality improvement- If the set of SOP procedures are followed perfectly then the quality of products or services delivered automatically improves. This can be achieved by quality checks at different levels. If necessary, amendments can be done for quality improvement and the same can be communicated to the staff and managers as well.
- Reduced risk of accidents- Having a proper set of defined SOP rules helps in reducing the risk of accidents. This also makes sure that your employees are safe as well as your documents are safe from any kind of accidents that usually take place in the firms and factories.
- Effective team management- When employees are hired by following certain SOPs and trained accordingly. This way they will get to know the particulars associated with the working process of the company such as frequency, responsibilities, and completion signals. This helps them in working fast within a specified timeframe and generate confidence; reducing errors.
Why is an internal controls assessment required for small businesses?
Every business irrespective of size needs a proper internal controls system so that its finances are managed properly. Without proper internal controls a business risks employee fraud, cash flow shortages, or even bankruptcy in certain cases. Some internal controls that must be used by small businesses include:
- Conducts the background check of employees before hiring
- Help keep personal and business finances separately
- Creates cash flow projections on a monthly basis
- Sign cheques yourself
- Review payroll before it goes out
- Review all kinds of payments
- Ask vendors to submit detailed invoices
- Review monthly financial statement of your business
Read our blog - Why Internal controls are important for small businesses to prevent Fraud?
Why are cybersecurity and IT security a must for small businesses operating from anywhere in the world?
Cybersecurity and IT security are a must for all kinds of businesses operating from any location on the globe. There are several confidential data that businesses tend to keep in the cloud. This risks the data and makes it more vulnerable to cyber theft and damage. Cybersecurity and IT security help in protecting the data from theft and damage.
Read our Blog - What are the biggest cybersecurity threats in 2021?
How can NSKT Global’s services help in generating revenue for a small business?
NSKT Global is a global consulting firm with a team of certified public accountants, certified fraud examiners (CFE), certified Sarbanes-Oxley experts (CSOE), Business Advisers, Internal Auditors, Data scientists and IT experts. We extend all kinds of help to our clients and assist them at all possible junctures of their business. Our services such as accounting, internal controls, Fraud Investigation, and Performance Dashboards help in the development of small businesses. They are designed in such a way that it understands the crux of the problem and provides the best and customized solution to each and every small business approaching us for help.
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