Financial Prosperity and Self-Sufficiency: 5 Considerations for Small Businesses

Financial empowerment has proven to be critical for small businesses to sustain and thrive during times of crisis. In the last year, the economic landscape has changed substantially due to the COVID-19 pandemic, causing many small businesses to close. Bloomberg highlights that, by the end of July, 800 businesses filed for Chapter 11 bankruptcy, and over 80,000 small businesses have permanently closed. Of those businesses, about 60,000 were local companies with less than five locations.

Small businesses are more vulnerable to crises and economic downturns because of their financial fragility. A Harvard Business Review report on the pandemic indicates that businesses with monthly expenses in excess of $10,000 generally did not have enough cash to cover even two weeks of spending.

Loans and financial assistance may help businesses survive a downturn, but they do not provide a long-term solution for financial success. Ultimately, businesses must create operational excellence to generate self-reliance and growth.

Judicious financial management is a stepping-stone to self-reliance.

Financial prosperity is not the result of higher earnings alone. Efficient financial management is key to sustainability, higher profitability, and business growth. It helps ensure:

• Financial transactions are tracked and recorded accurately, including account receivables.
• Tax obligations are planned for accordingly.
• Income is invested efficiently.

Client relationships are critical to success.

Business development is central to small business sustainability because it builds revenue. As clients struggle with the financial implications of COVID-19, it is vital to continue supporting them with the solutions they need.

Small businesses and startups thrive on business relationships that are based on foundations of trust and customer loyalty. Understanding customer needs helps strengthen existing customer relationships, foster trust, and drive client loyalty.

Accept help when needed.

Most small business owners need to multi-task to fulfill the many operational roles the business may require. By multi-tasking, however, business owners may divert focus from accurately identifying challenges and areas that may need attention to ensure financial prosperity.

Outsourcing arrangements — even partnerships — are an effective way for small businesses to take advantage of infrastructure and skilled workers that would otherwise be inaccessible. An outsourced partner can review and assess the business to identify challenges and problem areas, as well as outline solutions.

An experienced partner can help with various growth initiatives, including advising on particular infrastructures, IT solutions, value-added services, and industry-specific insights. These services, as compared to the attempt to create in-house capabilities, enable small businesses to easily scale and provide significant value to clients at lower costs.

Deploy intelligent solutions, including automation and software.

Before determining the right engagement solution, effective automation demands an in-depth and thorough analysis of the business’s operational and customer needs. Depending on the assessment, businesses can choose to automate select areas or ensure entire sections of the business are supported.

It is vital to choose the right outsourcing assistance or to partner with a company that can align with your business, understand requirements, and utilize technology to create a positive impact on the overall operations and management.

Consider “outside the box” operational solutions.

To keep pace with client demands and stay competitive within their own industry, small businesses and startups first must empower themselves. Actively seeking assistance with business operations is one way to better position yourself for success. Professional partnerships and outsourcing provide businesses with access to expertise and assistance, without extensive cash investments.

Outsourcing providers are typically equipped with proven systems and infrastructure. Their experience allows them to provide effective financial guidance through business insights.

Analytix Solutions is a single-source integrated solutions provider delivering high-quality services consistently, cost-effectively, and collaboratively. We offer customized, scalable solutions to startups, helping to ensure that the business has the right infrastructure in place from inception. Our breadth of industry experience, coupled with financial and technical expertise, allows us to develop solutions specific to your startup’s needs.  For more information on how we can assist your business, call us at 781-503-9000 or email us at sales@analytix.com.

Written by

Analytix Editorial Team