As rewarding as it is to run a business, it’s a time-consuming and exhausting job at the best of times – even when you’re not dealing with any additional pressures.
But we’re living in times of economic and political uncertainty, and many business owners are feeling the strain.
In 2018, organisations have had to contend with GDPR, coping with late payments, and the ongoing uncertainty of Brexit.
Small business confidence hit a seven-year low in the last three months of 2018, with 43% saying they expected their performance to worsen during the next three months.
This instability will probably go on for a while yet, but in the meantime, here are some steps to protect your business against these challenges.
Use Xero to monitor your cashflow
Even in a successful business, problems can still arise if you don’t properly monitor, forecast and improve your cashflow.
It’s a good idea to check your cash balance daily, and to regularly review your forecast. Xero can make this much easier, allowing you to keep track of your data in real-time.
You can also link Xero with add-on apps such as Chaser to allow you to automate invoices and reminders.
This saves you time chasing your customers up for late payments – which are a main cause of cashflow problems in small businesses.
You could also consider introducing early payment discounts, or charges for late payment.
Assess your spending
This doesn’t just mean a quick glance at the numbers – spend some time scrutinising every area of your spending.
Ask yourself how each item you’re spending on positively benefits your business, and if your expenditure could be more efficient.
For example, look at how the software you use meets your needs. If you’re using two different systems for similar tasks, could you replace them with one system that can do both?
In some cases, outsourcing functions like payroll can also be a cost-effective option, freeing up time that would be better spent on other areas of your business.
Plan for the challenges ahead
During difficult times, it’s easy to find yourself getting caught up in the stress of the moment. If this happens, remember to take a step back, look over your figures, and plan accordingly.
Think about the events that might affect you in 2019, whether that’s upcoming challenges for your business, or wider changes.
For instance, increases to auto-enrolment contributions and the national living wage could create additional costs, and the introduction of MTD for VAT might cause some initial disruption – not to mention Brexit.
A detailed analysis of how these issues might impact on your business will help you to create a realistic budget and set targets for the year ahead.
Don’t stop marketing
While you might need to be fairly ruthless about cutting some of your costs, don’t fall into the trap of reducing your marketing efforts during difficult periods.
When consumer confidence is low, it’s more important than ever to attract new customers and stay visible to current ones.
Social media marketing is one way to maintain a strong presence without spending huge amounts.
Talk to us
Whatever challenges you face in your business, we’re here to help you tackle them.
Our Love My Business service helps you use the financial figures from your business to plan, grow and progress towards your goals.
Contact us to talk about how we can help.