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3 Ways to Make Your Business More Secure
07 March 2011
Without having to do an entire analysis of your business operations, here are 3 quick strategies to minimize risk and ensure you will ride through the recession with a healthy and profitable business:
Strategy 1: Analyse your sales
Know what you sell and to whom
Know which products and services are more in demand
Know what each product or services contributes to your business
Ideally, sell more of the 'in demand' products, sell more of the high value products, focus on the products that contribute a large proportion of your company's revenue or profit.
Be mindful of the sales cycle too. If you have a very high value product that has a long sales cycle, factor that into your forecasting. Balance the long sales cycle products with those that are easier to sell, and are in effect your company's 'bread and butter'.
Strategy 2: Analyse your marketing returns
Marketing options are many, but not all marketing produces the same results
Make a point of knowing which marketing activities produce the best results. If you've never tracked it then start doing so, otherwise you will potentially waste not only money but energy and time
Also, make sure that the marketing activities which produce the most results also produce the best results - that is, they attract the sort of potential clients that match your target profile
Strategy 3: Analyse & track your cash flow and sales forecast
I can't tell you how many clients I have worked with who don't have sales forecasts and don't do budgets. If you don't forecast and track, you can't effectively manage your cash flow and/or adjust your sales and marketing activities.
Develop a P&L budget for your company and/or your product
Over estimate your expected expenses and underestimate your expected sales
Track on a regular basis (frequency will be determined by the length of your sales cycle: if you own a retail shop you can track this daily; if you sell high-end software systems you may track monthly)
These 3 strategies alone are very quick and effective ways to minimize risk in your business and stay ahead in a tight market.
Jenny Stilwell is the Managing Director of BOSSMENTOR®, a consultancy providing advice on strategy and business growth for professional, lifestyle-oriented owners of service-based businesses who want to grow their businesses and ultimately spend less time in them. Bossmentor® provides mentoring programs, consulting services, and a range of resources for business owners wanting to grow. Visit http://www.bossmentor.com.au