During a time when businesses of all sizes struggle with the financial ramifications of an enduring pandemic, small businesses are especially vulnerable to suffering from economic pain. Do the same words of wisdom that apply during robust economic growth periods apply to an era when many small businesses have to recover from closure and other significant economic issues?
The answer is now more than ever. You need to implement time-tested financial strategies to increase the profits for your small business.
Establish a Line of Credit
Securing credit for your small business can make finding a cure for the Coronavirus seem relatively simple. However, securing a line of credit for your business should be at the top of the list for the financial strategies to increase small business profits. After all, it takes money to make money.
Here are the five most important reasons why establishing a line of credit should sit atop of your financial priority list:
- Quick access to cash
- Pay expenses when it matters most
- Cover emergency costs
- Improve the creditworthiness of your business
- Pay back what you use, not what you borrowed
As opposed to a loan that you have to pay back in full. A credit line is similar to using a credit card to pay for business expenses. You only have to replenish the amount of money you used to pay for business-related expenses. For example, let’s say your business needed a cash infusion to take care of a water main break. Instead of taking out a $10,000 emergency loan with a lender, you tap into your credit line to pay off $ 2,500 to make repairs to the water line.
Know What to Look for in Accounting Software
Accounting used to be a dirty job. Well, not in the sense of getting dirty in the trenches to install cable for an upgraded cell phone system. Accounting involved writing down everything in a ledger that was kept up to date on a daily basis.
Technology changed all of that, and technology continues to change the way small business owners and operators keep the books.
Using tailored made accounting software for your small business can be the difference between swimming in red ink and having a surplus of cash to invest in a more comprehensive digital marketing campaign.
Here are a few tips for buying accounting software to increase small business profits:
- Purchase software that matches your accounting skills
- A cloud software application reduces the amount of your investment
- Customize features
- Stay within the company budget
Perhaps the most important tip is to follow the advice of the person who is responsible for completing accounting tasks. If that person is you, then the decision to purchase accounting software should be a much more streamlined process.
Find the Right Credit Card Processing Company
Did you know that small businesses can shop around for a credit card processing company? Even better, many credit card processors offer a one-year contract that after expiration provide small business owners and operators with the opportunity to negotiate more favorable terms of service. As a small business owner or operator, you wear dozens of professional hats, from savvy digital marketer to confident product buyer. According to Double Helix Processing a high risk account that proves their fraud rates to be lower can absolutely negotiate after a period of time to prove your track record. This is not an agreement to renew without negotiating and shopping around.
Her are a few questions you need to ask, before signing up with any credit card processing company:
Does the company understand my business needs?
How responsive is customer service?
Is the system secure from fraud and identity theft?
How much are the fees?
How long of a commitment is required?
Find the Right Payroll Processor
It is not just the credit card processing system that shaves money from your operating income. Your small business also has to pay for processing employee paychecks. As with signing up for a credit card processing system, you should shop around for the best deal in the payroll processing market. Editor of Payroll for Dummies, Ken Darrow, has a few suggestions to help small businessowners and operators shave a few dollars off payroll processing expenses. “There’s three things that payroll should do for you. It pays employees on time, it pays your payroll taxes on time, and it actually files your payroll tax forms on time. You want to do all three of those to be compliant with the law, and you also better do the last two or you’ll get fined.”
Make Your Online Reputation Shine
Starting a blog and uploading helpful tips on your business website represent two strongly impactful ways to increase your customer base. Perhaps the most effective way to enhance the online reputation for your small business involves asking customers to write positive reviews on site such as Yelp and Google. More than 80 percent of consumers reference online reviews as a tool for determining where to shop for virtually any type of product. As one of the easiest and most affordable financial strategies to increase small business profits, online reviews replace traditional word of mouth advertising as an effective way to boost sales.
Now more than ever is the new mantra for small businesses to use when searching for financial strategies that increase small business profits.