Original Title: How microbusinesses take the first steps toward sustainability – Small Business UK
The key to financial sustainability is being able to withstand a business’s inevitable ups and downs. Here are five tips for running a financially sustainable startup.
5 Tips to Make Your Small Company Financially Sustainable
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Focus on the bottom line.
The most important thing is to focus on ensuring your company’s revenue grows and your costs cut into that growth. If you’re not seeing those two things happening, then something else needs to change to ensure you remain financially stable.
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Stay lean and mean.
You want to keep your overhead as low as possible, so don’t add unnecessary employees or expenses without a good reason (e.g., if you need more people working on a project).
Also, avoid overspending by keeping an eye out for deals that will save you money in the future, such as buying in bulk or negotiating better pricing from suppliers or vendors.
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Be prudent with capital expenditures (CAPEX).
Often small and mid-sized businesses have limited funds available for CAPEX projects (i.e., long-term investments such as equipment purchases or new buildings), so they must invest wisely when they have funds available for these types of projects.
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Start small.
Small businesses are often more likely to go under because of the high failure rate, according to the Small Business Administration (SBA).
But if you start with a small business, you can build it up as your company grows over time. This gives you more time to invest in nurturing your employees and customers and makes it easier for potential investors to see that your company has staying power.
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Be realistic about your goals and budgeting.
If you set unrealistic expectations for your startup, it will be hard for you to stay afloat during tough times — and even harder if your business fails before it gets off the ground! Set realistic goals based on what you know about running a sustainable business
Lastly,
Set goals and track progress monthly or quarterly.
Setting goals is essential in any business, especially if you’re starting one from scratch because without them, there’s no way to measure success.
Having clear goals on paper will also help keep everyone on the same page, making it easier for everyone involved when things get busy or challenging during growth or change in direction (e.g., new products being launched).
And as a bonus, having these written down helps prevent people from forgetting about them when things get hectic!
Author Bio
Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of RMS card machines. He also writes non-fiction on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice cream on his backyard porch, as should all right-thinking people.