Small and medium-sized enterprises (SMEs) experience challenges nonstop and is always looking for opportunities to improve. In this article, we will discuss some of the most common yet overlooked things that can boost business productivity and profit if done correctly.
If you’re looking to start your own business despite the pandemic, you’re not alone. Many new business ventures are surfacing thanks to the dynamic needs of people around the world and the tech advancement that comes with it. However, if you’re an existing business owner looking to develop a more productive operation, you can still learn a thing or two from this article.
Don’t settle with a flawed accounting system. Not having a robust accounting system leads to huge problems down the road, especially if billing and collecting are delayed. Some companies doing good work were slow to invoice their customers. In many cases, customers in large corporations often won’t pay until 90 or 120 days after the invoice. Many corporate customers use invoice modifications to re-start the payment clock, which means orders and additions must be handled efficiently to get payments on time.
Many businesses operate with tight cash flow, which makes on-time payments a requirement. Therefore, slow payment from customers can mean a larger balance on loan/s, which leads to interest expense. Moreover, some small businesses have maxed out credit lines or need a new business loan from a better provider, so slow payment limits the company’s growth. In any case, it’s vital to collect quickly.
Avoid setting prices too low. Most business will retain their prices at the cost of losing profit to retain customers, but more often than not, the company offers unique value that buyers recognize. After raising prices, it may take a while to notice customer reaction and loyalty. However, after a couple of months or an appropriate time lag for your business, it’s usually obvious that the price increase was the right move.
Not all businesses can raise prices without sacrificing some customers, but it can be worthwhile or even required to consider it. Instead of looking at lost sales, you need to focus on the value to the customer. Owners and managers must believe in their brand, strive to deliver the best possible product, and not be afraid to charge for its value.
Being too tolerant of low-performing employees. Low staff performance undeniably leads to overall poor business performance. It’s worse when a badly behaving employee forces others to spend time mending issues or covering for the absent employee. Accepting poor performance can alter the company culture so that productivity and quality are less important. A lousy employee also infects other employees with the idea that lousy work is okay.
If you’ve been affected by the ongoing pandemic, or are looking to upgrade your business, consider a business loan Singapore offers for small businesses. Once approved, you can use your additional capital for hiring necessary labor, emergency salary provisions, marketing boost, infrastructure upgrades, etc.
Indeed, it’s not easy to run a small or medium-sized business. However, considering these things can help your business move forward. Above all, businesses need customers to thrive and get loyalty, and you must entice them with value to sell to them. So it’s understandable that issues surface along the way, but remember that understanding what your customers want and how they feel are key to success.
For help saving on labor costs without compromising the health and safety of your workers, please see the infographic below.
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