3 Tips to Safeguard Your Small Business From Failing

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3 Tips to Safeguard Your Small Business From Failing

Running a small business isn’t easy! It can feel like there are a million things to do and no time to do them. It is important to make sure you focus on what is important and not neglect things that can sometimes be overlooked. Read these 3 tips to ensure you safeguard your #1 asset.

3 Tips to Safeguard Your Small Business From Failing- graphic of staff

1. Look after your people

What’s more important than your people?! It can be easy to let your #1 asset fall to the wayside when things get going. The busier you get, the busier they get. Sales go up, it all seems to be going perfectly.

Employee retention and staff churn can impact your growth, hinder your FY goals and directly hit your bottom line. Conservative estimates put the cost of losing an employee at 20% of their wage but a skilled worker can be as high as 200%.

Open communication and understanding what makes your people tick is the first step to ensuring they enjoy their job, align with your strategy and thus reduce your staff turnover.

Ensure you are having regular 1-on-1s with direct staff members. Make sure you have structure when you approach them and if you ever find yourself putting them off, don’t! Your people are your greatest asset! Additionally, if you have any people that don’t report directly to you, spend time with them as well. They don’t need to be as frequent but are a vital part of a good employee engagement strategy.

3 Tips to Safeguard Your Small Business From Failing- business calculator

2. Manage your accounts

Raising an invoice is easy. Getting the money isn’t always so much. All too often, small businesses are crippled by their outstanding debt. You have carried out the work, and charged for the service but the money just isn’t coming in.

Firstly, if you find yourself saying ‘I don’t have time to chase outstanding invoices, pay someone else to do it. Employing an account receivables specialist to chase your accounts or paying an external service will mean your money comes in the door much faster so you can continue to service your debt, focus on your sales and relieve stress.

If you don’t have the money to pay someone else, find the time! Regular contact is the starting point. Always ask your customer when they will pay it and chase them if they don’t. There is nothing wrong with asking when you will be paid.

Having outstanding accounts receivable can cause additional stress you just don’t need. Make sure you manage what’s coming in the door before the door gets closed!

3. Protect yourself

Sometimes no matter how hard you try, things don’t always go to plan. Understanding what risks exist in your business is the first step, and then protecting yourself is the second.

Conduct a risk assessment using a simple matrix. Write all of the risks you can think of down on a piece of paper and then sort them into a matrix like below.

3 Tips to Safeguard Your Small Business From Failing- business decision matrix

Once you have decided what risks are of a high likelihood and have possible severe consequences, start on them first. You can’t necessarily get rid of them, but you can definitely put a risk strategy in place to monitor and manage them.

If you provide professional service or advice, Professional indemnity insurance is a good place to start. David Green from ProfessionalIndemnityInsurance.com.au says, “There any many different types of business insurance but a PI cover is the most common. Due to the growing nature of professional services, there are many more professions that can be covered”.

Running your own business can be tough. Use the above three tips to make it a little bit easier!

Sarah Miller

Sarah writes about her personal journey, learning, life optimisation and her passions. For more thoughts and ideas, you can connect with Sarah on Twitter

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