As a business owner, you have a lot of responsibilities to a lot of different people, but all of that responsibility ultimately ties into staying in the black. In business, the term “in the black” means that a business is profitable and it’s where every business wants to be, regardless of its size or industry. The opposite of “staying in the black” is called “being in the red” and you want no parts of that.
But just what are some of the things that a company needs to do in order to reach that highly sought after status? Obviously, there’s no straightforward answer to that problem. However, that doesn’t mean that you’re out of luck when it comes to ensuring that your company stays ahead of the curve by continuing to turn a profit regardless of the economic conditions.
In this post I’ll be offering some advice on staying in the black, so keep reading! You may be surprised at some of the different practices that you can put into place to ensure longevity for your small business.
Cutting Cost, Not Services
It’s no surprise at all that, given the way things are now, people all over the world have had to come up with ways to do more with less. There are a number of different avenues that you can approach when it comes to making sure that your company keeps its doors open. It’s important to remember that regardless of whatever action you take, you want to do so without harming your relationship with your customers, the most important people in the operation of your business.
And here are some ways you can make that happen:
- Budget – This is an important enough step that it should really have a post all to itself and I honestly cannot stress enough the importance of establishing and keeping to a budget.
It’s an important practice to keep to in your day-to-day life, and it’s equally important to keep to when you’re running a business.
A strong financial statement analysis will show you just what you have possession of as far as your cash goes and how it’s being used, but having a budget to work with will make sure that you have a plan for that money.
From the liabilities to which you are obligated every month, to the expenditures that you employ in order to grow, you need to track every penny that your company spends if you want to get ahead.
Budgeting helps with staying in the black by making sure that financial waste isn’t something that you will have to worry about eating away at your bottom line.
- Assess Your Needs – From the chair upon which you sit, to the computer equipment used to do your job, to the suppliers who supply you with what you need to ensure that your product makes it to market, there are many different pieces that have to come together to ensure that a business operates.
But are those pieces the right ones for your operations?
From time to time, consumer news stories address the idea of consumers abandoning brand name items for lesser-known or generic alternatives, and many consumers find that these alternatives are just as effective at meeting their needs. There’s no reason to think that you can’t take that same principle and apply it to your business practices.
Sometimes, staying in the black means looking at what you use to get the job done and evaluating whether or not there’s a more cost-effective way of doing things without losing productivity. With that in mind, one thing I want you to do is look at the equipment you use and make sure that it’s the right fit for your company. Likewise, I want you to look at your business to business relationships and make sure that the terms on which they stand are mutually-beneficial.
Staying in the black often means knowing when to renegotiate terms while ensuring the same level of quality that you are used to receiving from your company’s suppliers.
- Invest in Your Employees – Provide your employees with that they need and the returns will be tremendous.
Your employees are the face of the company, the thing by which your customers will remember it, so staying in the black should involve them in some way.
First and foremost, you want to make sure that your employees are constantly learning on the job. They can only grow if they continue to learn something new, so emphasize personal development as part of your business philosophy and make them responsible for widening their range of knowledge.
Everything from the skills they need for their respective jobs to the many rules of customer service should be covered when training employees because doing so will ensure that your company operates at its most efficient and customers will keep coming back through your doors as a result.
- Keep Your Marketing Efforts Up – Even if your company had a name that was practically synonymous with a product (i.e. Coke = soda, McDonald’s = fast food, etc) staying in the black still involves putting your company’s name out there for people to see.
You will need to continually promote your brand to customers, attempt to establish relationships with new partners, and conduct many other activities that will increase brand recognition as well as your chances for increased sales, regardless of what the current economic climate might be.
Beyond the Obvious
These are some of the basic things you can do when it comes to staying in the black and ensuring that your company remains profitable, but I assure you that these suggestions don’t even scratch the surface. By doing some of these things, you can make sure that your business sees positive gains all year long, not just during times like Black Friday when consumer spending traditionally rises above normal.
Running a profitable business should be thought of as a marathon, not a sprint, and practicing some of these methods that focus on staying in the black will make it so that you’re able to go the distance as a business owner and establish a brand that will be able to stand strong for years to come.
Remember, running a business successfully does not need to be complicated. Keep it simple!
For more valuable topics to help you successfully manage the challenges of growing your business profitably, please search our blog at our website www.portalcfo.com.
Manny Skevofilax is a consultant and speaker that helps his clients successfully navigate the challenges of growing their businesses profitably. Since 2003, Manny helps businesses enhance their results by using his experience in strategic planning, financial statement analysis, operations, organizational development, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at manny@portalcfo.com.