You need to add certainty to your business over the coming months. The National Federation of Independent Businesses released a report citing a drop in small business optimism during the month of January. So what are your plans for business expansion? How much control do you have over your business this year? Let’s discuss the state of small business this month and the 6 steps you can take to help keep your business above water and ahead of the competition.
In January the small business optimism index slipped 2.5 points down to 97.9. This is largely driven by fear of lower sales and reduction in earnings. The early slip is a major change from November and December where we saw huge increases across the board in spending, hiring and sales. While the Small Business Association defines a small business as having fewer than 500 employees; in fact 90% of them have fewer than 20. This means that the little guy needs to be on top of their game to ensure a prosperous future.
Since BizX has a sizeable community of businesses across most major categories, we wanted to share 6 things that we think can help you stay in control and keep growing your dream.
1. Setup to Win Even in a Down Economy
We can’t control the economy but we can control our future in it. The businesses that succeed in a negative economy focus on critical details like customer experience and long-term retention.
Your customers always come first. Find like-minded businesses that will be strong repeat customers instead of one-time spenders. Ensure that all of your customers have an amazing experience to keep them coming back, because even a 5% bump in customer retention can increase profits by 25% to 95% according to an article published by the Harvard Business Review.
2. Get the Credit Lines You Need
Almost a third of business owners borrow on a regular basis. Building and using credit is an important tool for your business and will be a main factor to its future growth. Not only does it help you weather the storm in bad times, but it also helps take some strain off of your cash flow, by providing access to capital when you need it.
3. Inventory Management is a Must
All businesses have some element of inventory that has to be managed. Old or stale inventory will, with time, become difficult to move, so it is important to ensure what you have is what you can sell. This is especially important because the liquidity of your business is an important measure of financial health for your company.
4. Keep an Eye on Wages to Earn a Buck
Labor costs always put pressure on the bottom line of your business. Are you staffed at the right level?
"Job creation is the core of growth and the small business sector appears to have shifted to second gear, boring but steady," the NFIB
5. Only Hire Staff that Share Your Vision
Your employees are the heart and soul of your business. They run the day to day operations and act as the face of your company. As we discussed above, putting the customer first is a great way to ensure success. So, hiring people who naturally go the extra mile and believe in the goal and vision of your company will make your job a lot easier.
6. Knowing the Triggers for When and Where to Expand
Timing in life is everything, especially for growing your business. Spend time considering both when and where. Ask yourself ‘why?’ all the time to ensure you are being thoughtful on expansion.
Is your customer demand so strong you are struggling to fulfill? If so, this is a great growth indicator. If not, at what point in the future will you hit this marker? This will help you understand when.
For the where, consider your total addressable market. If you provide local services (like a restaurant) closely examine competitors in the new areas to understand how many customers you will convert.
The macro changes in your industry need to be considered as well. Things like supply shortages and new or changing regulations need to be taken into account when thinking about where to plan your next expansion.
As you know, running a small business is not for the faint of heart. The leaders have to focus on tomorrow, not only today. To be successful it is important to understand the economic impact in all areas of your business. Some will be more useful than others, but these are some of the common themes that have helped make our members more successful. 
You can see examples of how here!
