I don’t recall checking your accounts receivables and ageing information for any outstanding balances. If after 30 days you have failed to receive payment, set up a template and a reminder on QuickBooks to reach out to your customers again. If some of your better customers require a 90-day term, you may probably finance your receivables through a Now account with a credit union or a factoring service. A/R finance is when you sell the account receivable to a third party who will give you the majority of the money you are owed and charge a fee to do so. The benefit of factoring is receiving your payment faster, which helps with cash flow. However, this is one of the more costly forms of debt financing. Consult with your banker or your local SBDC office to get more information.

Read and Understand Your Financial Statements

You must regularly review your Income Statement, Balance Sheet, and Statement of Cash Flows. It is essential to check all three to track your monthly income and expenses, understand where your money is coming from, and track your company’s financial health. If you are starting your business, you must have enough working capital to cover your expenses while building your sales to survive the initial startup phase of your industry. Your local SBDC office can help you with your financial statements and improve your budget.

Understand Your Customer Completely

If you desire to win, you must have a holistic view of your customer, similar to how well you know your mother. You need to understand who your customers are completely, their interests, where and when the best time to engage with them is, where they are located, and how they obtain information. To ensure your message reaches your intended market, it is necessary to conduct systematic research.

Get Close to Your Competition

We’ve all heard the saying, “keep your friends close and your enemies closer.” It is essential to know your competitors to understand their strengths and weaknesses. This will give you information you can use to find areas where you can add a unique product or service that your competitors are not offering. You can also use the information to identify any potential weaknesses they have, which you can use as opportunities to attract more clientele or to capture an unserved market.

Hire Slow and Fire Fast

Take your time and make sure to hire the correct candidate. We propose using the SBDC rule of 3’s: meet at least three candidates for the position and interview them three times. For example, do an initial phone interview, then have the candidate come in for a formal interview. The final discussion could be an informal “out of the office environment,” such as a cup of coffee or lunch interview. Also have the candidate interview with at least three key people to get different perspectives. Finally, always check references. Additionally, when you have an employee not performing to the position requirements, it is better to let the person go sooner than later, as both parties will be better off.

Join and Contribute to Your Local Chamber

Connection building is necessary for your business. Get involved with the local chamber of commerce, as they have valuable resources, guidance, and events to help you expand your business. It is also an excellent time to network and meet other business owners.

Be a Lifelong Learner

Stay current and become an expert. A business is time-consuming, but to stay competitive and gain an edge, you must continually look for ways to get better personally and in your industry. There are endless resources, books, and classes that the SBDC offers to help you gain new skills.

Hire Out What You Cannot Do or Do Not Like to Do

Don’t try to do everything. Try to think of the business’s big picture and long-term success. If you are not good at bookkeeping or particularly have a desire to do it, hire an expert who can. This will allow you to focus on the tasks you enjoy that better suit your strengths. Some of these services can be an added expense, but it is better to free your time to focus on the parts of the business that are revenue-generating. Also, it is easier to hire an expert to do the task right from the beginning than to do it yourself, mess it up, and then have to go back and make corrections, which costs more in time and expense in the long run.

Conclusion

The best businesses have multiple sources of revenue, competitive pricing, a 50% or better gross margin, and a 10 to 20% profit margin. If your numbers aren’t this attractive, it will be difficult to survive. So make sure all the numbers work before beginning your venture.