“A journey of a thousand miles begins with a single step.” – Lao Tzu
We hear the phrase all the time “Fake it until you make it”, but honestly, that phrase makes me cringe. See at Finance Savvy CEO we don’t believe in “faking” anything, it’s important to just be and do, and instead, we believe in embracing and being exactly where you are…and using it to your advantage.
In the business world, it’s easy to fall into the trap of wanting to follow the giants – those big corporations with seemingly endless resources and expansive budgets. However, for small businesses like you and me, this desire to play “big” can often lead to financial pitfalls and missed opportunities.
In this blog, we’ll explore why embracing your size and strengths and adopting a mindset of strategic, measured growth is paramount to achieving your financial goals.
SMART SPENDING
As small business owners, it’s essential to focus on what truly matters for your business for where it currently stands, and where you want to go. Rather than trying to imitate big companies and their spending habits, it’s crucial to prioritize your spending based on your organization’s size and the milestones you’re aiming to achieve.
Remember that smart spending is key, no matter how much revenue your business generates. If you don’t spend wisely, it will be challenging to maintain profitability and reach your financial goals.
To ensure you’re spending smartly, consider the following:
- Assess what makes sense for your business at the present moment. Avoid getting caught up in spending based on an idealized future. Instead, invest in areas that will provide immediate benefits and contribute to the growth of your business.
- Assess what makes sense for your business based on what you’re trying to achieve in the upcoming future. Identify your next nearest milestones. These are the specific goals you want to achieve in the near future. Allocate your resources and expenses accordingly to support the accomplishment of these milestones, rather than spending excessively on areas that aren’t directly aligned with your objectives.
By being mindful of your spending and aligning it with your business’s current needs and future milestones, you’ll be on track to maintain profitability and ultimately achieve your financial targets. Remember, smart spending is essential for small businesses to thrive and succeed in the long run.
STICK TO STRENGTHS
As a small business owner, you have a unique advantage – your size. Being smaller allows you to make decisions quickly, without the burden of a hierarchical chain slowing you down. This agility enables you to swiftly adapt to changes and seize opportunities that larger businesses may struggle to capitalize on. Focus on leveraging your existing strengths:
- Take a step back and assess what you excel at currently, and how you can build upon that foundation. By identifying and honing in on your core competencies, you can strategically position yourself in the market, and improve your business finance and business operations.
- While it’s natural to want to compete with larger businesses on price, it is often not a sustainable strategy for small businesses. Instead, emphasize the value you’re able to offer as a small business – whether it’s exceptional customer service, unique expertise, or personalized attention. Highlighting the qualities that set you apart not only attracts customers but also builds brand loyalty.
So, embrace your small stature. Rather than feeling compelled to imitate the big players, focus on what makes your business special. By capitalizing on your agility, leveraging your strengths, and offering value beyond price, you can position yourself for long-term success.
FINANCIAL SAFETY
For small business owners, ensuring financial safety is crucial to the long-term success of your business. It’s important to be aware of certain practices that can help protect your business from financial trouble:
- Avoid borrowing too much money too soon. While it may be tempting to secure a large loan to fund your business growth, it’s wise to proceed with caution. Taking on excessive debt can put you at risk of overburdening your cash flow, making it difficult to meet your financial obligations. Instead, consider starting with a conservative borrowing strategy that aligns with your cash needs, current cash obligations, projected profitability, and financial goals.
- Manage your expenses effectively. Managing expenses doesn’t mean “starving” your business from expenses needed to support growth. However, regularly reviewing and trimming unnecessary costs can go a long way in maximizing your profit margins. Being disciplined with your spending habits will allow you to maintain a healthy cash flow and better weather any unexpected financial challenges.
- Prioritize cash reserves. Building up an emergency fund can provide a financial buffer during lean periods or emergencies. Setting aside a percentage of your revenue every month can gradually create a safety net that ensures the continued operation of your business even during unforeseen circumstances.
By adopting these practices and making thoughtful financial decisions, you can safeguard your small business’s financial stability. Regularly assessing your borrowing, managing expenses, and building cash reserves will contribute to a solid foundation for your business’s long-term success and security.
STEADY GROWTH
In the world of entrepreneurship, the saying “slow and steady wins the race” couldn’t be more relevant. When it comes to growing your small business, it’s important to avoid the temptation of playing big and growing too fast. Why? Well, you can actually put yourself out of business if you grow too quickly before your operations is able to appropriately support and sustain the growth.
Imagine this scenario: you’re so focused on rapid growth that you neglect building solid systems and processes. The people come, but the system to support them is lacking. As a result, disaster can strike. You may fail to effectively deliver to your customers, causing frustration and disappointment. Upset customers are the last thing you or any business owner wants.
So instead of rushing into quick growth, consider adopting a more measured approach. Take the time to build a strong operational infrastructure that supports your business and financial goals. By doing so, you’ll ensure the effective delivery of products and services, leading to satisfied customers who will keep coming back.
Remember, Rome wasn’t built in a day. By focusing on steady growth, you’ll set a solid foundation for long-term success in your small business journey.
BOTTOM LINE
“Small steps lead to big dreams.” Remember that the path to reaching your financial goals lies not in “playing big” and imitating the giants, but in harnessing your strength, spending wisely, embracing steady growth, and taking advantage of your “small” business status. Keep moving forward, one step at a time, at a speed that makes financial sense for YOU!
Do you want to know how you can leverage your unique strengths as a small business owner? Click here now and discover the power of value and experience to support your pricing!