SMALL BUSINESSES – HOW TO STAY AFLOAT & TAX TIPS

The economic downturn has hurt many small businesses. The recession didn’t just hurt companies related to real estate, banking and mortgages but also a significant number of businesses dealing with essential and non essential items.

A lot of employees have been laid off and have stopped spending on anything other than what is absolutely necessary. There are ways to bring back customers during these tough times. And though you may not experience high profitability, it may help you stay afloat and ride out this downturn.

Small businesses have limited capital and cannot afford to cut prices. However, if it will bring back customers, you may want to do just that. Customers are looking for bargains and deals and are attracted to special promotions. It is better to make a tiny profit than to have no sales at all.

You may also want to consider cutting down on any non essential expenses like expensive coffee in the break area. Cutting costs is a good business practice no matter what the state of the economy.

Set achievable revenue targets and reconsider company goals because in order to survive during tough times you may have to change business practices.
You may also want to give your employees well defined job descriptions so that employee tasks do not overlap. This will also lead to increase in productivity and improved time management.

Encourage employees to innovate. Employees are filled with ideas that could actually become good business strategies.

Advertising is an important factor to promote your business and the special promotions you’re offering. For example, it is natural to cut advertising budget. But it is good to note that your competitors do the same and therefore the cost of advertising significantly decreases. In case of online marketing, bids may decrease on important and expensive keywords. Sometimes, by maintaining your bid, you can increase AdRank and ROI. Also by increasing your advertising spend with fewer competitors in the fray, gives you the opportunity to capture market share.

It is the tax season and it would be advisable to invest in some good small business accounting software. Read all of the letters or emails you receive from IRS or state tax authorities. Do not spend several hundred dollars on a CPA just so that he/she can make sense of the receipts, credit card statements, checks and invoices. The more organized you are, the better you will manage your company’s finances.