(NC)-Most business owners will tell you it's not always necessary to grow to be successful - it's often a matter of getting the most out of what you've got. But many business owners work so hard in the business that they neglect to find time to work on the business.
That seems especially true when times are good and customers are coming in the door.
But when the economic weather changes, weak or ineffectual policies, practices and controls start to stand out. Unaddressed, they can severely hinder business success.
"A challenging economic environment calls for a good, hard look at your operations," says Stephen Aikman, national manager, Retail Clients at RBC. "In fact, periods of relative economic weakness create opportunity for strong retailers to gain market share through business re-investment and efficiency improvements."
Aikman offers these tips to stay buoyant in tough times:
Review your budget and plan for different scenarios - It's good practice, particularly in uncertain climates, to have three scenarios mapped out in your budgeting process - an ideal scenario, one that's reasonable, and a worst case situation.
Review cash flow projections - Since you're likely using your budget to predict cash flow and cash needs, use three-month cash flow projections, which are more realistic than one-year forecasts.
Monitor your finances and know your business danger signs - Keep a close eye on your financials - watch for warning signs like low cash flow reserves, increasing expenses, delayed payables, taxes in arrears, and decreasing sales.
Protect your business - Some ideas include: actively manage your relationships with suppliers, service providers and lenders by communicating with them regularly; secure related-party debt; limit personal guarantees for borrowings and land leases; and cover the repayment obligation if you have a line of credit or a term loan with a matching life insurance policy.
More information on these topics is available toll-free at 1-800-ROYAL-20 (769-2520), or online at www.rbcroyalbank.com/business.
- News Canada