How to avoid “risky” business and preserve your micro company’s reputation
risky? is a word you certainly don’t want associated with your business, and when you are a micro business it doesnt take much to shift from a healthy position to being viewed as a risk to do business with.
Once you have earned a negative reputation, it can be tough to shake, and with businesses hesitant to work with you, or investors failing to see your business as a worthwhile investment, it could soon spell the end. Below are some top tips to ensure your small or micro business is protected from risky business.
Smart money management
It may seem obvious, but being smart with your money is the number one stumbling block for small and micro businesses. Unstable cash flow has a direct link to whether a business is ranked good or bad to do business with.
Below industry average Days Beyond Terms? (DBT), which is how long it takes a company to pay their bills over the agreed payment terms, can reflect poorly on your business, and when you’re a small operation even a minor oversight in cash management can place your business squarely in the danger zone.
If you’re already having trouble staying on top of your cashflow, the biggest mistake you can make is to bury your head in the sand. Be aware of the problem and take back control of the situation identify where you may be able to scale back costs, make adjustments to bring your payments to suppliers in line with when your customers are paying, and chase those customers to pay on time, which leads me nicely onto my next piece of advice.
As the old adage goes, fail to prepare, prepare to fail. For micro businesses, unforeseen circumstances can set a chain reaction in motion that can quickly leave you struggling to get your head above water. Imagining worst case scenarios, while not much fun, can be an extremely useful exercise in ensuring your business is equipped to adapt to any adverse circumstances.
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