Three C’s for Running a Sustainable Small Business
News Small business owners juggle many different roles and it's easy for them to lose sight of their priorities in the daily hustle and bustle.
Among the many hats small business owners wear, one of the most challenging is that of CFO. In an Intuit survey, 25 percent of small business owners listed “paying my bills” as a top concern keeping them up at night. Additionally, cash flow (33 percent) and financial planning (24 percent) were the top two concerns among North American small business owners in Visa’s 2012 Small Business Cash Management Survey. Keeping track of what’s coming in versus what’s going out can easily be managed by remembering the three C’s: cash flow, control, and convenience.
"Keeping a keen eye on cash flow, spending controls and adopting convenient measures are sure ways to stay focused on running a sustainable business."
1. Cash flow – Many small business owners associate poor cash flow with declining sales, but that’s not always the case. In fact, fast-growth companies can be especially vulnerable. Accepting and using electronic forms of payment can help maximize income while keeping expenses under control. According to Visa’s Cash Management Survey, 75 percent of small business owners found electronic payments improved cash management processes. A few other simple tips to help you manage cash flow include:
Monitor Your Finances: Keep accurate records and track your monthly sales.
Forecast: Estimate your quarterly expenses and regularly modify projections.
Take Quick Corrective Action: If you notice a problem – no matter how small – in your financial analysis, take immediate steps to correct the problem and get back on track.
2. Control – An objective viewpoint and a critical eye on detail are paramount to running a healthy business. As a small business owner, you need to have control of your environment, but you also need control of inventory and spending. Take a look at your monthly expenses and search for cuts that can be made without harming the business. When it comes to growth, exercise caution and add employees slowly. Don’t go overboard on inventory by buying more than you need as this can deprive your company of valuable cash.
3. Convenience – Time is money and often in short supply. Small business owners need convenient technology to help boost efficiency. More than 370 million hours are saved by small businesses that use mobile apps to help manage their operations, and another 725 million employee hours are saved annually with the apps, according to a study by the Small Business and Entrepreneurship Council.
These three simple “C’s” may seem like common sense, but they can easily be overlooked in the whirlwind of your business day. Keeping a keen eye on cash flow, spending controls and adopting convenient measures are sure ways to stay focused on running a sustainable business.