So, if you want your passion to become profit, you’d better get au fait with running a business. To get you started (or just give some bright ideas that you might not necessarily have thought of) here are our top ten tips on how to do exactly that.
1. Take to the cloud
Managing business finances means looking at (i.e. collating, understanding and reviewing) a lot of data, which can be overwhelming if you aren’t a skilled accountant. Or in fact just aren’t great with numbers.
And if the latter is true, the sheer volume of data you have to deal with could easily take up your entire day — and, let’s be clear, that’s time you could use to make money. So this matters.
As an alternative, if you use cloud-based accounting software, you can access your financial data from anywhere in the world, at any time.
It also automates many processes connected with managing your company’s finances, like tracking expenses and sales figures, as just two examples. Overall, it’ll mean you’re aware and in control of your financial situation, which is vital.
2. Keep a record of everything
To have a realistic picture of your finances, your records need to be accurate and up to date.
Only then will you know how much you make from each product, and which product is the most profitable.
It will also ensure your cash flow is never stretched too thin, and will mean that you can make decisions about future tool purchases, investments, and changes to your offer.
3. Get ahead of the overheads
Do you know which overheads are costing you the most money? Can they cost you less in any way?
Trouble will catch up with you if you don’t have enough money to meet fixed expenses like wages, rent, utilities or taxes.
Keeping track of your most essential and common expenses will mean you always know where your money is going, and will help you stay in control of your budget.
Divide your expenses into core, non-avoidable and ones you can take or leave – then you can slim down at a moment’s notice if necessary.
4. Keep a check on those invoices
Late payments (or non-payments) can empty your financial resources fast.
You can keep track of any payments that haven’t been paid using a cloud-based accounting system, which can also automate reminders and alert you when a certain time has elapsed and further action is needed.
To this end, make payment terms and conditions clear from the very start of every client relationship. Then if an invoice isn’t paid, you’ll have a paper trail at your disposal to help you collect outstanding debts.
7. Strategise to optimise
If you don’t use company financial data and insights to develop an actionable plan, you won’t be to put together a business strategy.
If used properly, your financial data should clearly define your expansion – or whichever direction you want the business to go in,
Track your data monthly, quarterly and yearly so you can set budgets and avoid overspending.
For example, if a print advertising campaign costs more than SEO but brings in substantially fewer clients, you may be financially better off if you cut it.
8. Get more clients
The more customers you have, the more money you will make – as long as you can fuflfil their needs in a brilliant and timely manner, which might be a question of quality (and volume) of staff.
First though, you have to understand how to keep your present clients – customer retention is critical to growing your customer base.
To attract new clients, you can invest in various marketing strategies to achieve more awareness, engagement and traffic. But what matters most is that you strike a balance between the money you put in and the money you intend to make by attracting additional clients.
9. Boost your conversion rate
Web traffic is a good start, but it’s not enough. If your bounce rate is high, for example, you need to investigate the issue and make changes to convert those visitors into paying clients.
So, you should be aiming at techniques to improve the conversion rate without spending a fortune to achieve that.
For example, CTAs (calls to action) are an excellent tool for getting customers to buy a product instead of just reading about it. Appealing CTAs that promise discounts for a limited period can easily lead to a purchase spike.
Naturally, to achieve this, you have to find the right words and make it all visually pleasing, but with the right team behind you, this strategy doesn’t cost much and can be pretty lucrative.
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To that end, if you need help with your words, or want to learn more about business strategy from any of our team of experts (who between them have launched over 20 £1,000,000-grossing companies), just get in touch. We’re always happy to hear from you and always happy to help.
