Originally published on thetechheadlines.com
It’s impossible to predict the future, but it is possible to take steps to ensure the financial security of your small business. As entrepreneur Adam Ferrari explains, the only thing that’s constant is change.
1. Focus on Customer Experience
Customer experience, or CX, is one of the most talked-about topics in business today. There’s a good reason for that, as creating an excellent CX is critical to attracting and retaining clients today.
It’s also a great way to future-proof your small business finances. When you focus on creating a great CX, your customers are likely to remain loyal to you, even in challenging times. For instance, if there’s an economic downturn, they’re less likely to spend less with you than they are with someone else. It also helps as you try out new products or services to have a loyal customer base who will be by your side.
Customers today spend more and purchase more often from companies that provide them a great CX.
2. Get Insurance
Purchasing business insurance may not be top of mind, but it’s one of the most effective ways to future-proof your finances in the case of unforeseen events. You may be required to carry some insurance policies by law, such as workers’ compensation. Depending on your industry and location, you may be required to purchase other policies, too.
Even if you aren’t required to, though, having sufficient business insurance can help safeguard your finances in case of an unforeseen event. This includes property damage, theft, and disruption caused by an employee getting sick or being unable to work.
3. Build Up Your Employees
Your employees are your company’s backbone. Too many small business owners view their employee base as replaceable, though. When you invest in the growth of your employees, you’re investing in your company’s future and its security.
The more diverse and skilled your workforce is, the more your company is likely to be able to withstand challenges and change. In addition, your employees are the ones interacting with your customers the most, so they are responsible for enhancing your CX and, ultimately, generating more sales.
Invest in your employees by providing a solid benefits package and ongoing training to build their skillset.
4. Be Diverse
Small businesses sometimes put too many eggs in one basket. This can lead to significant issues should something occur in the marketplace that makes that one product or service line obsolete.
The COVID-19 pandemic is an example of this. Restaurants and bars experienced major disruptions in their business when they were forced to shutter. Even when they were allowed to re-open, they had to adjust their business line to consider delivery services and takeout — even if it wasn’t a central focus of theirs before.
Similar examples exist in many other industries, too. The more diverse your product or service line is, the more future-proof your company will be.
5. Constantly Deliver Value
Small businesses always need to deliver value to their customers. How this value is defined will likely change over time. It’s incumbent on small business owners to constantly innovate and create new ways to deliver value to their customers.
6. Save
One of the most effective ways to future-proof your small business finances is to save. As Adam Ferrari explains, all small businesses should have a reserve fund where they stash cash.
This should act a lot like a personal emergency fund. Small businesses should set aside at least two months’ worth of their operating expenses if they ever need it. This will help sustain temporary disruptions in revenue and/or cash flow.