Tip #25: Build a better business

Looking for simple yet effective ways to grow your business? Consider these tried and true techniques:

Sell more to your existing clients

Getting more revenue from your current customers is usually a low-risk, low-cost strategy. You could offer incentives on volume purchases, target existing clients with new products, create a website to provide value-added information, and/or develop a loyalty program that rewards customers for repeat business.

Find new client segments

Is there a market segment you've overlooked? Say, for example, you currently sell organic skin-care products to women; maybe there is a market for men as well.

Expand your distribution area

If you have been successful selling in your existing market, you might consider opening a new location. Remember though to take into consideration that you are entering a new market place and your potential return on investment could be affected by the high costs and risks of entering an unknown region.

Increase profit margins

Is there a gap between what you're charging and what people are willing to pay? Or can you reduce costs while holding sales prices steady? You may be able to identify a potential revenue growth opportunity.

Develop a new business model

A strategic alliance, such as partnering with another business to cross-sell products or services, can be an excellent way to expand.

Purchase a competitive or complementary business

Perhaps you own a café; purchasing the magazine shop next door could be a perfect fit, if done properly. While this is a complex strategy and you need to be cautious of which business to buy, the payoff can be high.

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Tip #26: Matching the right financing options to your needs

Want to keep your business growing? Cash flow is the fuel of your business growth. To keep your cash flowing, look for the right financing options to match your needs, and see how you can make your credit work as hard as you do for your business.

Short-term financing options:

Just received a large unexpected order from your clients but don't have enough cash to order your raw materials? We understand growth requires you to have products to meet increased demand, even if you don't have the cash. Short-term financing options - such as a business credit card, line of credit or overdraft protection -- help you to pay suppliers, increase inventory and cover expenses when you may not have sufficient cash on hand before you receive customer's payments.

Longer-term financing options:

Whether you're expanding a service offering, increasing your manufacturing capabilities or adding to a delivery fleet, adding capacity often involves a capital purchase - a high-priced item that you'll use over several years. Paying for it with cash on hand is often impractical and can strain short-term cash flow. Longer term financing options - such as leasing or term loans -- can help you invest in overall improvements of your business such as upgrading equipment, buying additional vehicles or perhaps renovating.

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Tip #27: Keep your financial picture in sight

Here are four financial tools you can't do without when it comes to controlling our finances:

1. Bookkeeping
   
   Accurate bookkeeping helps you stay on top of your finances. It allows you to compare forecasts with actual monthly figures and analyze monthly expenses. Bookkeeping also makes it easier to monitor your business's financial health, and helps you comply with tax requirements.
   
   
2. Cash flow statement
   
   Cash flow statements document your incoming and outgoing cash, defining payables and receivables plus depreciation of product value and unsold inventory, so you can assess your cash situation and other resources quickly and accurately.
   
   
3. Income statement
   
   By recording all your business's revenues and operating expenses for a given period, an income statement can offer you critical insights, including which areas are over (or under) budget and which items are causing unexpected expenditures.
   
   
4. Balance sheet
   
   Your balance sheet is a list of assets, liabilities, and owner's equity as of a specific point in time, or period of time. It lets lenders and investors perform a quick assessment of the state of your business. In fact, potential lenders, such as banks, investors, and vendors, may use income statements and balance sheets to determine your credit limits.
   
   

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The content provided here is for informational purposes only. You should consult your own professional advisors when implementing any strategy to ensure your individual circumstances are properly considered and that your actions are based on the latest available information.