Today’s shifting market and economy makes it challenging for many small business owners to raise money. On today’s show we’re pleased to welcome back LJ Suzuki, small business expert, serial entrepreneur, and the CEO of CFOshare, to discuss fundraising for your business in these challenging capital markets.
Those looking to secure funding without accruing interest should start by reprioritizing their goals. Suzuki notes that “So many businesses during challenging times shift their focus away from growth and towards efficiency.” This new emphasis helps them boost revenue by reducing waste and, while challenging, rewards entrepreneurs for the effort.
Suzuki has a process by which managers can streamline this re-prioritization. “When I’m working with a new customer, I always like to look at their gross margin,” says Suzuki. “Those can be a guide for you as to where you’re really adding the most value and where you need to focus your efforts.” Doing so can reveal the core reasons customers support a business and can help owners perfect these elements.
The next step is to review the utilization of company assets. An organization can improve its workflow and save money if it removes under-used but costly features. Using labor costs as an example, Suzuki names outsourcing, reducing hours or consolidating departments as ways companies improve the efficiency of their workforce.
After this, small business owners should start checking their non-essential assets. Unused personal belongings such as secondary vehicles can provide much-needed funding in difficult circumstances. Revenue earned from sales is instantaneous and low effort, which is why Suzuki recommends this to those struggling to make ends meet.
Finally, Suzuki warns entrepreneurs that they must monitor the market and budget accordingly, using key performance indicators to guide their investments. “The point of a budget isn’t to make a financial document, the point of a budget is to make a plan,” he concludes. While market prediction is difficult, it sets the ideal groundwork for all future decision making.
Entrepreneurs experiencing the effects of financial uncertainty can quickly ease their difficulties by implementing these recommendations. When the next market turnaround arrives, young companies will have matured and be even more confident in their strategies.
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