In a world where economic breakdown, recession and bankruptcy form the front page news almost every other day – small time or even for that matter established businesses grapple hard trying to keep their businesses afloat. Whether it is Europe, America or Asia, failing economy, rising production costs and demanding labor all contribute to a potent mixture that not just impedes business development but rather shuts it down completely. It does not matter what the business is, it can be a bank, an insurance firm, automobiles industry or even an entire state (Detroit) or a country (Greece), inability or failure to save money to keep businesses up and about, can and will lead to disastrous consequences. So how can one manage their money more effectively and safeguard their business against possible economic shut down? Following are few pointers
Chalk Out your Plan
-Clearly define your resources and goals. Try and keep both in sync with each other. You cannot plan goals for which you don’t have the resources.
-Survey the market closely. This is important so that you have a certain idea as to what the raw material costs.
-It is a good idea to form relationship with local vendors and keep their contact numbers handy. They can help you strike a good bargain while purchasing.
Hire and Purchase only what you Need
-This practice should be followed very closely as over indulgence in any of these will eat up into your revenue, which can be crippling for your business
– You may find a range of photography for sale to decorate your office or other cheap options that will make the place look nice and professional, try to limit your purchases to the strict minimum.
-Bulk ordering will only put more pressure on the resources, unless off-course you have immediate use of the material purchased.
-Few exceptions like when purchasing in bulk will be cheaper and the materials can be stored without much hassle, is however a smart move.
-Hiring the staff is equally important. You need to be very particular about the number of people on your payroll. The more the staff, higher is the cost to company, a situation that you should avoid. You may want to look into HCM applications as they may help control your payroll and keep your profit margins high.
-Keep the employees on your payroll well and update them periodically with necessary skills. Offering them incentives for their good performances will only build their loyalty towards the company and greatly reduce attrition.
Aids from the Government
-This is especially important if you are running a business where the cost of machinery and land are very high.
-Most governments offer subsidiaries to deserving businesses and it will be of immense help to your business if you are in touch with the right government officials to keep you updated with new schemes.
-Again keeping the contact numbers of few important officers will keep you in the loop of new schemes rolled out by the government.
Account and Credit
-When you are in business, you will at some point, most certainly, take credit from banks and also private investors. It is of utmost importance that you keep a close check on your account books and have a clear cut idea of how much money you owe in the market, the interest rates and the principle amount invested.
-This will also come in handy when filling income tax returns and other very important government procedures.
-It is a good plan to invest in infrastructure, but again, you need to be smart and careful about it.
-Investing in too expensive or too cheap materials will serve you no purpose and will only add to your financial burden.
-Think about different sources of energy you can use. This might require some investment initially, but in the longer run will greatly curtail the running energy costs.
-Investing in low maintenance long lasting material might be a little expensive initially, but will greatly benefit you in the longer run.
There is an old saying, Money saved is money earned and it will do you and your business much good if you stick to this age old wisdom. However, where to invest and where to save will require close inspection and critical scrutiny. One should be open to suggestions from other more experienced people and if necessary hire some business development executives as well.