Developing a successful business isn’t easy. This field is unpredictable, so much that you can go from smooth to struggling very quickly.
One of the challenges that many small business owners face is to stay afloat. Statistics by Harvard, a research organization, revealed a 29 percent reduction in the number of small businesses that were opened in 2020.
Now, while these statistics can be discouraging, it’s essential to remember that many small businesses are still opened up to today. Thankfully, there are some things you can do to avoid becoming bankrupt. If your business is struggling financially, here are some tips that can help you stay afloat.
#1 Save 20 percent of Your Monthly Revenue for Unexpected Situations
You have so many expenses to spend on. However, if you want your business to stay afloat, saving for an emergency is your best bet. Note that your business needs available capital to thrive in these tough economic times. However, many small business owners agree that this is a top challenge. But, lacking cash at hand when financial turbulent hits, sets a quick end for a small business. This is why a business needs to save to continue operating.
These funds will come in handy whenever there is a drop in your revenue. Plus, having some savings will prevent you from taking a loan to help your business stay afloat. Try allocating 20 percent of your total income to savings every month.
Although saving is difficult, it’ll prevent your business from being bankrupt in case of unbudgeted situations.
#2 Find an Investor Who Will Help Your Business Grow Faster
Business ideas are crucial to the success of a business. However, those alone will not make you grow. You need capital and networking for your company to grow faster. And you can achieve these by getting an investor.
Well, many people are always skeptical about investors and for a valid reason. You’ll have to allow them to contribute to how you set up and run a business.
However, even with them, you still have controlling power over your company. So introducing them will help your business grow. Investors will give you capital, meaning you’ll not struggle financially. And they can also introduce you to other people who can help your company grow. Once your company grows, your finances will be in a better place. Thus, you’ll have enough revenue to manage your expenses and save for emergency funds. Therefore, you’re less likely to fall into bankruptcy.
#3 Get a Cash Loan and Start Investing in Marketing
Your business needs funding to stay afloat. A cash loan can give you these funds. You can get it if you can prove that your business has started making money and is gaining traction. If the idea of an investor doesn’t suit you, you can approach other lenders like the Little Loans, commercial banks, and even accounts receivable specialists for a loan. However, before applying with any lender, research and find the best for your business and needs.
Additionally, you need to market your business. Marketing increases brand awareness and, ultimately, sales. The more people know and buy your products/services, the more revenue you will make, which prevents your business from falling into bankruptcy. You can use several marketing strategies, including social media marketing, paid advertising, internet marketing, or word-of-mouth marketing, among others.
#4 Start Using Social Media More Often to Reach New Customers
If your business is not on social media, you are missing out on many sales opportunities. This tool helps companies to engage and connect with their current customers. But it can also help you get new leads that you can convert into buyers.
There are various ways individuals can gain new customers on social media. For instance, one can use social media to market and promote their products and services. For example, you can put professional pictures and videos of your products on Facebook and let people know what you’re selling.
Also, social media can help you attract a large customer base by increasing your brand awareness. The visually appealing content businesses post on social media can catch the attention of potential customers, who will become aware of your brand and may decide to buy from you.
Additionally, one can build custom audiences on social media. Note that social media channels let you know how many people were interested in your product, the number of shares, likes, call-to-action, and purchases, if any. You can build a custom audience using these stats, which will help you target individuals who seemed to be interested in your business but didn’t proceed to pay for their cart. Then, you can convert them into buyers.
When your business gets new customers, it increases your revenue, which will, in turn, help you stay afloat. Therefore, take advantage of this powerful tool today.
#5 Make a Discount Program for Your Loyal Customers
Customers need to feel valued and important. And one way businesses can do that is by offering discounts. Discounts help you attract new customers, boost your site traffic, and increase sales. But when offered to regular customers, it helps build customer loyalty, which is important in preventing bankruptcy.
Most businesses depend on repeat customers more than new ones. So make sure that you keep them coming back by offering discounts to appreciate their decision to purchase from you. You can give them percentage discounts on your products/services or reduce the shipping fee if you’re an online business.
Conclusion
Even though being bankrupt is not the end of the world, no one wants their business to reach this point, especially if they can do something to prevent it. These tips will protect your business against financial ruin. Even if it is on the verge of falling, don’t give up yet. Use these tips to fight for its future.
Baburajan K
