Is Your Business Scalable? Here’s What You Can Do

Scalability is one of the most important aspects of every business. No matter which industry you are from- telecom or finance, software development or manufacturing, your business must be bbuilt-in a way that with time, you can expand it easily at minimum costs.

If scalability is a bit of a gray area for your business, then this write-up can serve as a basic guide for getting started.

Is your Business Scalable?

One thing you need to get out of your way first is, well, finding whether your business is even scalable or not. Most businesses that are based on the owner’s skill set or talent are not really scalable. This is because such businesses are limited by just one person’s abilities.

A scalable business is the one which is able to keep the costs low while increasing the revenue gradually. In fact, the less is the involvement of the owner, the better it’s for scalability.

A good example of a scalable business is a software firm. This is because while the initial investment for developing software products may be high, once that’s being taken care of, the business can simply make copies at a very small cost. Similarly, e-commerce, or rather any kind of business that’s selling products online is highly scalable. This is because revenue can be increased by promoting the business through blogs, webinars, and other popular forms of digital marketing tactics.

Making your Business Scalable

Now that you know what makes a business scalable, you can change your business model accordingly. The following are some of the key features of a scalable business:

  1. Optimum Cashflow

Cash flow problems are one of the leading causes behind business going defunct. So, if you want to scale, you must ensure a good cash flow. The following are a few tips that can come in handy in that enterprise:

  • Make it easier for your customers to clear invoices by offering as many payment methods possible. Apart from the standard debit card and credit card options, you can also offer them to pay through digital wallets.
  • Levy a penalty for late payments if you aren’t already and let your customers know about it. A good way to do this is to mention it in the invoices. When your clients will learn about the penalty, they will be more likely to pay on time.
  • Don’t merge your personal expenses with business expenses. That’s the key to good cash flow management.
  1. Partnerships

Why would a successful business want to partner with another business? What’s the need? Well, believe it or not- partnerships in the realm of business are extremely important, even for the biggest players. For instance, Nike and Apple are considered as some of the most powerful companies in the world. Then why did they join hands in 2006? They were already successful. What were they looking for? Well, the answer is Scalability.

By working separately, the dominance of Apple and Nike was limited to some areas. However, by inking a pact they were able to venture into different realms and scale their businesses. The Nike+iPod Sports Kits, Apple Watch Nike+, are some of the excellent examples that support this point.

  1. Automation

Automation is the future of businesses. There are all kinds of software available through either a SaaS or license model that you can use for automating various tasks such as invoice and expenses management, attendance management, lead generation, and what not.

There are several advantages of automation:

  • Saves time- Employees can focus on important tasks that are more suited for a human intelligence
  • Saves Money- The more business operations you will automate, the less number of employees you will need which translates to fewer salaries
  • Scaling on the Go- Automation can make scaling super easy and fast. By establishing a system that can automate the majority of the workflow, you can easily hire new employees and train them in minimum time or add and sell new products without affecting the efficiency of your business operations.

If you want your business to be scalable, you must think two steps ahead. You need to make today’s decisions based on your future projections. If only that is being taken care of, all the pieces will eventually fall into place.

how to manage cash flow with a small business loans

How to Manage Cash Flow With a Small Business Loan

Cash flow is the lifeblood of every business, whether it’s big or small. However, when small businesses or startups have to take business loans, it changes everything. Not only the business has to maintain enough cash flow so that they can pay for inventory, staff, and other expenses but also the loan installments as well. Money management also becomes a challenge as there are several factors to keep an eye on.

If you are having difficulty in managing your business cash flow along with a small business loan, then here are a few tips that can help you:

Planning Ahead

Don’t leave any room for surprises. Nothing is more daunting than desperately searching for cash when you have to pay your employees or the loan EMI that’s pending. It always helps to keep a record of your previous cash flow statements and expense reports when you have to anticipate future expenses. This will help you maintain a healthy cash flow as you can easily check where your money is going and what’s to come in future.

Shrinking Cash Outflows

Running a business along with a loan can make it difficult to stay cash flow positive. While you can’t usually reduce your loan EMIs easily you can still reduce your cash outflows to some extent by:

  • Buying used equipment: Why invest in 100 new computer systems when you can get used ones for less than half the price? If you are lucky you can get them in excellent condition at a local auction or at a classified ad posting website.
  • Cutting Down on Luxuries: Hosting weekly office parties can be good for boosting the morale of your employees, but when you have to save money such kind of luxuries can be avoided, at least until the loan is fully repaid.
  • Finding a Better Provider: Many businesses depend on vendors who supply hardware or software services to them. Maybe you can replace your existing vendor with someone else who is providing equally good services at better prices.

Securing a Line of Credit

With the rise of new FinTech companies, even small businesses are now able to enjoy a variety of financing services. One of these is Line of Credit or LOC.

An LOC is akin to traditional loans, but you only need to pay interest on the amount withdrawn. For instance, say you secured an LOC of Rs. 3 lakhs from a financial institution, then this is the amount of credit available to you. You don’t have to pay a penny until you actually withdraw the money. So, if somewhere along the way your business runs into some problems with the cash flow then you can withdraw a portion (or even full amount) of the credit amount, say Rs. 1 lakh. With this, you only need to pay the interest and the fees (if applicable) on the withdrawn amount only, which in this case is Rs. 1 lakh.

LOC is a really convenient and affordable option if you want leverage when you have a business loan but need to maintain cash flow at the same time.

Becoming Stringent With Payments

Do you let your customers delay payments without any repercussions? This could be extremely bad for your business. You can’t organize your expenses and keep the cashflow under control unless you get your payments on time. You can thus create a strategic process for dealing with delinquent payers that could involve:

  • Sending an initial email 10 days following receipt asking for payment.
  • Calling up the customer directly after 20 days for the payment.
  • Sending away a clerk to the customer’s address in person for payment collection.

Being nice is one thing, but in business you should not let your emotions affect your decisions. You can’t run your business successfully if won’t put your feet down when needed.

 Embracing Technology

Since small businesses often have to struggle to create an identity and obtain market share, it doesn’t help that they have to track their expenses as well which alone by no means is a walk in the park. Thus, it helps to have a specialized software that can do all the formatting, updating, and calculation of all these expenses for you. If anything, this makes one less thing to worry about, and you can use the time saved in building your business.

Cash flow Management at a Whole New Level

A comprehensive business software can greatly improve your existing cash flow by limiting the margin of errors in calculations and expediting invoicing and payments altogether. Here is how you can make the most of it:

Organizing Your Billing Schedule

You should keep a track of pending payments and send the invoices on time every time. This ensures that your cash flow doesn’t dry up and your business stays operational. You can also take care of your loan payments without worrying about debt accumulation when you know that everything is on schedule. Managing the same without an automated system can be quite difficult, and thus not even advised by most professionals.

Keeping the Pricing in Check

Are you charging adequately for your services and products? Many times businesses become so caught up with expansions and other business operations that they delay raising prices with inflation, etc. This can be detrimental to the cash flow. However, with a billing software you can easily check if you are imposing reasonable tax on the products, and price them adequately as well. You may need to charge certain clients more due to some extra services, their location, or requirements, etc. This can make creating custom invoices for them difficult. With an Invoicing software, you can easily customize a base template depending on your clients. You can add or delete certain fields from the invoice as per your requirements and send custom invoices in a matter of minutes.

Analyzing Weekly Cashflow Statement

Monitoring your cash flow is extremely important to ensure there is a healthy balance between the cash that’s incoming and outgoing. There are so many expenses to cover, loan payments to take care of, employees to be paid, and more. At the same time money can come from various sources- individuals, businesses, and more. The best way to review these transactions is to use a billing software that can provide all the details in an organized and simple manner. You can check these details on a weekly basis to ensure you are on track. Even if for some reason you notice that the cash flow is depleting you can pinpoint the weakness and take appropriate measures for restoration.

numberz is one of the few business management software in India that comes with a full range of tools and services that can take your company to the next level. In an industry where businesses are facing neck to neck competition, automated software can certainly give you an edge and improve the cash flow.