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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
How You Can Jumpstart Your Business in Two Years
Once you've taken that big step and opened the doors of a new business, your next one is to get it growing. This is where it can be most challenging for newly formed businesses because they need to generate cash flow on their own. You may be able to get a bank loan or funding from venture capital investors down the road, but for at least five years it'll usually be up to you to maximize your cash flow. Here's a few tips to grow a business on your own in a couple years.
- Priority One Is Sales
Your source of cash and revenue when you're starting out is going to have to come from your sales and profits. That means you may need to put a lot of emphasis on winning customers, explaining why they should buy your products and services, and maximizing your daily, weekly and monthly sales numbers. It may mean working overtime some to increase your revenue, but you absolutely need to maximize it. Just never sacrifice quality or customer satisfaction in order to make more sales.
- Cut as Many Overhead Expenses as Possible
In order to grow and not lose money to excessive expenses, you'll want to eliminate as much overhead expenses as possible. The most common overhead expenses to deal with are property rental and taxes, utilities, paper consumption, employee salaries, and insurance. When you're just starting out, you probably shouldn't be renting out luxury offices with all kinds of ritzy amenities. You probably want to start from home at first and consider using equipment that won't cost you high utility bills. Consider working with minimal staff at first and then scale up as your bottom line increases and you can actually afford hires.
- Have an Effective and Sustainable Marketing Plan
To get business and drive up profitability, you need to be able to attract customers. The marketing strategy can be what makes or breaks a business looking to grow in a short time because a lot of money could be spent on marketing. But without getting the maximum ROI from it, your business could be wasting money and shuttering its doors sooner than later. You first need to know who your main customer base is going to be, where they can be found, and what kind of advertising they respond to. Marketing is not defined by how much money is spent or how elaborate its system is, but on how effective the message is. Growing quickly will depend on getting this right.
- Have Some Cash Reserves or Alternative Financing Ready for Slow Periods
For startup businesses, experiencing slow periods is inevitable and much more challenging than it is for established businesses who have more resources to rely on. To get through slow periods, you should have some cash savings set aside specifically for your business that you can use to take care of overhead costs and retain employees. It is wise to keep your personal savings separate from your business savings to ensure you are prepared for a personal emergency. If you do find yourself facing an unexpected emergency while your savings are tied up in your business, you might consider applying for a credit card or an online installment loan to get you through the tough patch.
A slow period can also be a time to work on refining your business plan, reformulate your sales and marketing strategy, spend a little more time in accounting, or several other things. It may take a few short-term sacrifices to keep your business open until things speed up again.
In conclusion, it is going to take a little more effort to keep your business's engine running without the influx of bank loan or investment funds. But if you have the right sales and expense cutting plan and can execute it, there's really no reason your business can't reach its growth potential within two years.
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