Financial discipline and paying close attention to details is more important now than ever if you want to succeed in business and continue to thrive during challenging economic times.
You may have been fortunate in the past. You also may have found it feasible to operate without a detailed, written plan and systems/processes. But the shifting global economic landscape has changed all of that. If you want to prosper, there is only one thing that is for sure – uncertain times call for deliberate decisions and proven practices.
Here are seven tips to help you succeed in business.
1. Begin with the end in mind
If you don’t know exactly where you are going, how will you know when you get there? Now is the second best time to decide on your strategy, set your goals and document tactics and timelines. Keep it simple – write a 2-3 page summary of what you intend to accomplish in 3 months, 6 months and 12 months.
2. Focus on cash flow not profit
You cannot buy a house or a new car with “profit” from your business. Make it your mission this upcoming year to develop and maintain a weekly/monthly cash flow forecast for your business. This is not hard to do but it does require discipline and a simple excel spreadsheet.
3. Collect your debt NOW!
How many days does it take to collect your debts on average? Whatever it is, make it your goals to reduce this by at least 10 days. You may be surprised to know that if your annual revenue is around $500,000, you could save yourself up to $2,500 in interest carrying charges simply by collecting your debts 10 days quicker on average. Pay attention to customers who are taking longer than usual to pay. Now is not the time to be extending too much credit if you are concerned about their ability to pay.
4. Rank your customers
Do you know who your best and worse customers are? Have you ever tried to calculate how much profit you are making from each customer or group of customers? If you don’t know the answers to these questions, today is the best time to start tracking and measuring this.