In small business, flexibility is a key, contributing factor to making your business work. Flexibility allows you to shift focus to meet market demands.
Whether flexibility means changing your business model, your pricing structure, your staffing policies or your suppliers, the ability to pivot and change direction could mean the difference between success and failure. When it comes to managing company finances, it pays to have a good relationship with a bank that offers flexibility around payment terms. Let’s delve a little deeper.
A flexible business model
Often when we start out in business we have an idea of what will work. Reality hits pretty quickly as sales and results either come your way or they don’t. Be ready to do more of what’s working and to stop doing what doesn’t work. In order to know what IS working, you will need to have a good grasp on business finances and understand which activities are profitable and which are not. A good relationship with a bank and an accountant will help you analyse your business performance accurately.
A flexible pricing structure
It’s not uncommon for small businesses to struggle to set prices correctly. Many look at what the competition is doing, without knowing if the competition is actually making any money. Often we’ll price ourselves too low just to get the work, leaving us without room for a profit and making it difficult to keep a client when we decide to increase our costs to reflect what our work is really worth. A good way to determine your prices is to look at industry benchmarks but also to test pricing points. Another idea is to package or market your business using different strategies than the competition and to create product ‘bundles’ that allow you to build in value and raise your prices.
A flexible team
Can’t afford full time staff? For many small businesses outsourcing provides an affordable labour service. Whether you outsource to workers in your city, country or overseas, bringing on talent if and when you need it means you can manage and plan for expenses and cash outlay based on the amount of business you have coming in. There’s a lot to learn about how to recruit, manage, train and retain virtual staff, but it’s an investment that more and more small businesses are finding allows them greater flexibility.
Flexibility with suppliers
The last thing any business wants is to have progress impeded by a supplier that cannot deliver what you need when you need it. Managed strategically, suppliers can really be allies who support your business cycles. In fact, their flexibility could and should be a determining factor for your supplier selection. Think about configuring your supply networks around pricing, repayment terms, delivery terms, product availability and customer service. Don’t leave yourself at risk by having a single supplier on whom much of your cash flow and sales depends. An ANZ Small Business Specialist can assist you with every aspect of your business finances, including managing your cash flow, applying for a business loan, consolidating your banking and streamlining your accounts. If you would like to find out how you can grow your business through finance please go to http://www.businessloans.anz.com/ to find out more. This article is sponsored by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ). The views and recommendations that are made in this document are those of the author and not ANZ. To the extent permitted by law, ANZ disclaims liability or responsibility to any person for any direct or indirect loss or damage that may result from any act or omission by any person in relation to this material.