Starting a company is only half the battle. Keeping it viable is much more challenging. So many problems can knock it out of business. Here are the top 5 risks your small company is exposed to.
Growth in sales is a distinctive feature of a healthy company, large businesses that started out years ago may grow little by little to survive. But for a small entity to stay afloat and even to flourish, revenue needs to increase at a fast speed.
A decrease in sales is a severe symptom that needs to be treated once identified. How? The first answer that comes to mind is by reducing prices. However, that won’t work if you continue to spend the same amount of money on production. Cutting prices should always come alongside cutting the cost of the goods sold. Another way out for a diversified company is to reduce the products or services delivered or select these more carefully. Business costs will favourably drop, but clients are also likely to shift their preferences to competitors once you’ve slowed down your pace.
Operating in the shadows will not bring new clients or stimulate sales.
It’s fine to struggle for customer acceptance through cold calls during the first year in business. But at some point, a business has to start running on its own fuel. If a company has a sound business strategy, customers will eventually start looking for its products. If clients don’t come unless solicited, then it is a signal to big trouble.
Small companies have to market aggressively to survive in the world of business competition. However, marketing efforts may cost a lot. If you can’t budget much for them then turn your clients into promoters. Try introducing a referral program with a reward for drawing friends. One satisfied client can attract 3-4 more. Word-of-mouth advertising is good, online marketing is better. Organise a contest or a workshop and spread the word about the event via Facebook. Use hashtags to make it easier to find.
A good employer is committed to paying salaries regularly and on time. Small businesses, which are more exposed to financial troubles, may face difficulties meeting their payroll. Such situations have to be remedied as soon as possible. Think of designing a viable strategy to increase sales quickly or to cut other expenses.