With the economic climate as it is, small business financial concerns are an all-too-familiar reality. To ensure your business is successful, follows these tips and avoid these financial pitfalls.
Know your core competencies: When you know what you do best, you’ll also know what areas of business you need help in. Don’t try to do it all yourself. Focus on what you do to generate revenue, and ask for –or hire– help for those areas that are weaknesses or time “bandits.” Hire resources, such as an attorney, banker, CPA, or marketing and public relations expert, and have them at your disposal.
Have a plan: Use timelines to keep your business focused and on track, and write down your expectations for each goal. Set aside time for administrative and financial planning so you don’t get behind on these two critical business areas. A good rule of thumb is to dedicate the 15th and 30th of every month to financial matters: logging and paying bills, tracking and entering vehicle mileage, updating financial projections, etc.
Understand your finances: It’s important to fully grasp your financial climate. Talk to other small business owners in your same industry and find out what their recommendations are to maintain cash flow and plan for the future. Consider looking into a line of credit when cash flow is solid, so that it is there when you need it. Also, determine if a small business loan is a good option for you.
Know your customer: In order to keep a small business afloat, customer service is key. Know who your audience is for the services or products you offer, and how best you can serve them. Also, consider those who influence your customers. They might not be your direct customer, but they can be a source of third-party validation. For example, at Telhio, we have a Preferred Partner program, where we work with small businesses to market their services to our members.
Explore alternative funding sources: There are many sources available that are often less expensive than traditional bank financing. These financing options are available so you don’t have to deplete your personal, family funds, or home equity. For example, Community Development Corporations are nonprofits that can be great resources for small business owners. Additionally, SBA loans or local, state or federal development dollars can be accessed through a variety of sources. Many times, local community banks and credit unions work with these entities to help their small business members thrive.
Don’t hurry; go at “game speed”: Many small business owners want to become bigger faster without understanding the pros and cons that rapid and sudden growth would have on their resources. It’s critical for small business owners to know that most businesses fail within the first one to two years, and remember not to rush progress. Again, if you find yourself growing and in need of financial assistance, don’t be afraid to seek it out. A little financial boost now in the form of a loan or line of credit could mean the difference between success and failure later.
Telhio Credit Union is open to everyone who lives, works, worships or attends school within Franklin County and surrounding communities. Founded in 1934, originally as the credit union for the Columbus Telephone Co., Telhio is a not-for-profit financial cooperative where its members are also its owners. Driven by its philosophy that members come first, Telhio is committed to the highest standards of responsibility and conduct.
Telhio offers a variety of innovative programs, services and products to support its members’ financial needs. Telhio offers seven branching offices throughout central Ohio and nearly 4,000 shared branching locations nationwide. Additionally, Telhio participates in the highest level of combined federal and private share savings insurance available, insuring deposit accounts up to $500,000.*
* Federally insured by NCUA. Additional coverage up to $250,000 provided by Excess Share Insurance Corporation, a licensed insurance company.