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Strategy #1: Expand by Contracting

While it may initially appear counterintuitive, for many small businesses, the best way to expand is to contract. The logic of this strategy is fairly straightforward when we recognize that the number one metric owners want to increase is profitability (as opposed to simply adding growth for growth sake), as additional sales can often be closed, but at the expense of margins.

Two of the ways that businesses can expand profitability include adding more high-profit work and subtracting more low-profit work. By reviewing their client base and actively pruning those projects which take up large amounts of resources yet yield a small amount of profit, firms can better optimize their workforce to pursue higher margin work and expand their profitability for 2013.

Strategy #2: Specialize

An off-shoot of Strategy #1, specialization challenges companies to narrow their brand messaging and business model to focus on going deeper within a specific domain, and thereby becoming more valuable and dominant in their sector. The proliferation of advanced technology, and a connected, worldwide workforce means that competition will only increase in intensity in the years to come. By choosing to double-down on specific verticals riddled with complexity, small business owners can increase barriers to entry for potential competitors and buttress their reputation within the industry.

The effective implementation of this strategy will initially involve entrepreneurs scrutinizing the current offerings of their firm, aligning them with the expected trajectory of the industry, and then making the tough decisions to refine the product mix from trying to be a “Jack of All Trades” towards becoming a highly specialized industry expert commanding top dollar. By applying the 80/20 Rule and determining which 20% of their clients are responsible for 80% of their financial success, small business owners can better customize their offerings, and selectively cater to the most profitable niche of their marketplace.

Strategy #3: Embrace Daily Deals

Over the past 24 months, there has been a meteoric rise and fall of the “Deal of the Day” or “Flash Sale” phenomenon. While the frenzied euphoria of this business model is now behind us, the measured and pragmatic benefits of a correctly applied Daily Deal approach can serve as a valuable arrow in the quiver of entrepreneurs seeking growth. Whereas earlier, small business owners would look at Daily Deals as a profit maker, today they are leveraging this model as an inventory management tool (facilitating rapid turnover of aging products to make way for new shipments), as well as utilizing the visibility of these deals to complement ongoing marketing initiatives and build brand awareness. While many firms still can and do generate profit from Daily Deals, the true business value of this marketing strategy must be taken in total with these other organizational benefits.

Strategy #4: Offer Self-Serve Options

For years, the Internet has offered individuals the opportunity to peruse and purchase products 24/7, yet many companies have still not structured their business to accommodate this environment. By designing a website and ecommerce system with a wealth of information on request, as well as FAQ’s and standardized order forms, businesses can leverage the power of automation to take some of the burden off of their staff using highly refined online content to advance prospects through the marketing funnel and engage them precisely at the critical time they are making a buying decision.

Strategy#5: Go Big or Go Home

While Strategies 1-4 provide solid expansion options for 2013, for those small business owners for whom incremental growth is just not enough, private equity funding is the way to go. By providing the founder with the security of cash in his pocket, plus sufficient capital to pay off all outstanding debts, expand internal systems and infrastructure, add more top leadership, and scale the organizational footprint to bigger markets, a private equity investment offers the fastest way to get there. By removing the month-to-month financial pressures of payroll and production costs, business owners can enjoy a renewed focus on making the strategic decisions that will position the firm for accelerated growth in 2013 and beyond.

In the current economic climate it can be difficult to keep things afloat. The last 5 to 10 years have seen many businesses struggling to get by, prompting dramatic changes of business models or steps towards insolvency or recovery. If you’re worried about your business it only takes a walk down any high street to see you’re not alone. Large retailers BlockBuster, HMV and Jessops have gone into administration since Christmas, so now is the time to take action.

Things are ok at the moment. What steps can I take to keep my business afloat?

With the current state of the economy, even if you are making profit, things can spiral downhill very quickly if you’re not careful. You’ll need a watertight business plan, so talk to an advisor. Their help can save you a fortune later on. They will help you see your business through the eyes of potential customers, including the shopping experience and services you provide. You might be advised to make changes, and it’s important you follow these changes through.

Things are already bad. What options do I have?

Insolvency and recovery options depend largely on just how bad your business’s financial situation is. If you notice difficulties arise, it’s important to take action as soon as possible and not to wait for issues to resolve themselves over time. If this happens you can halt your insolvency or recovery programme, but if your company is trading while insolvent directors can be liable for wrongful trading. You don’t want to find yourself facing legal action or being personally responsible for debts, so take action now. A financial advisor will guide you through your options, which may include refinance, administration and liquidation.

Liquidation is the winding up of a business so it ceases to trade. Creditors’ Voluntary Liquidation is the most common form in the UK, involving closing the business and selling its assets to pay debts.

Pre-pack administration is when the company is sold to a third party (the administer). This is a good option if you are under a lot of pressure to react quickly, but it does mean the administer can sell the company without the agreement of creditors – unlike in liquidation cases. It can, however, be sold to the current directors to create a phoenix company; essentially your old business with a new name.

If a bank (or other creditor) decides the directors aren’t suitable, they may appoint an administrative receiver to take over running the company. This person can sell off assets and recover money as they see fit, and will primarily serve their own interests. This is called receivership, and means the conduct of directors will be investigated.

Voluntary arrangements and voluntary liquidation are a much better option than court ordered compulsory options, but your business doesn’t have to get to those stages. Consider debt management, lending money or restructuring before your cash flow problems get out of hand. Business recovery experts will be able to help you, whatever your situation.

In highly competitive fields of work such as fund management and share trading, overhead tasks like registry services are becoming areas of specialty, with niche companies offering registry solutions and the like. Following the lessons of Ford’s infamous assembly line, this type of business works on the basic principle that specialisation in areas like corporate and share registry services is the key to efficiency, and therefore increased output, in any line of work.

Staying on the positive side of the bottom line, day in and day out, is not just about increasing the amount of work done but decreasing unnecessary overheads within your workplace.

Such as with registry services and registry solutions in the field of fund management, many business owners may think that their employees waste time doing menial tasks. But, taking a step back, many successful businesses come to realise that it’s the employees themselves, and the skills and training they have, that are wasted on menial tasks or tasks for which they have no training.

Leaving overheads such as share registry services to these providers of registry solutions may seem like even more of a hassle or unnecessary expense, but the reality of the situation is that cutting the menial tasks out of your business allows for workers to focus on the tasks that match their skill set; to challenge themselves with work and by putting aside registry services to the experts, and to become experts and specialists in their own fields.

What’s more, outsourcing registry services and the like to companies that focus on share registry services as their core business, means even faster output with less mistakes. Outsourcing a time-consuming and ultimately costly overhead of your business can only add positives to your bottom line.

When hiring out tasks like share registry services to registry solutions providers, you are not merely replacing one group of workers for another. You are also investing in the information and contacts you will acquire by hiring specialists. They will do more with registry services than what your distracted employees would have been doing otherwise had your registry solutions not been outsourced.

There are always opportunities to invest and your money can work hard if it’s in the right place.

But investments can be tricky, and we can’t all be a corporate trustee performing trustee work. That’s why a managed investment scheme, also known as ‘managed fund’, ‘pooled investment’ or ‘collective investment’, could be a lucrative option.

According to the Australian Securities and Investments Commission, a managed investment scheme is a collection of individuals who have pooled their money together to get an interest in an investment. The pool of money is then managed by a corporate trustee or trustee company who performs the trustee work. Individual investors have little or no control over the day to day operation of the funds or the investment.

Examples of managed investment schemes include: Film financing, share trusts, cash management trusts and property trusts.

A managed investment scheme can be effective due to the focused nature of the work. For example, there are many opportunities for investment in the Australian agricultural sectors. But unless you’re a financial analyst, a farmer, a corporate trustee, or a trustee company, spotting these opportunities, as well as the potential risks, can be tricky.

A corporate trustee performing trustee work could easily spot the combination of a lucrative investment and the potential for a future tax benefit. There are also risks involved in these investments, which a corporate trustee or trustee company could also spot.

For example: An agribusiness managed investment scheme may seem great for the tax benefits, but the realities of this sector can make predicting returns difficult. Shifting your funds around to another managed investment fund can prove to be difficult, as is pulling your money out. A corporate trustee or trustee company could spot these downsides while someone less experienced would have trouble.

So if you’re a middle income investor aged 55 plus, an agribusiness managed investment scheme may not be for you due to long-term nature of the returns.

However, a share fund properly managed by a corporate trustee diligently performing trustee work can pay great dividends. With a broad portfolio to manage and minimise risks from market fluctuations, the right equity fund in the hands of the right corporate trustee or trustee company can enjoy a steady growth over time.

Every day, the web becomes more and more useful for sales people; and as technology advances, the likes of video web conferencing perfectly replicates face-to-face conversations in just a fraction of the time of a traditional sales trip. Being able to make personal highly effective sales pitches at the drop of a hat, anytime and with anyone from anywhere in the world makes closing a sale that little bit easier.

For those sales people who have finely tuned their phone routine over the years and are sceptical about the advantages of using video for meetings, here are a few benefits to make you reconsider:

1. Online meetings using video allows for facial expressions to be read. Much of how we communicate is through facial expressions, posture, intonation and eye contact – all of which are lost when using only the phone to seal a deal. A video call allows you to use all of these tools to your advantage.

2. Sales people often feel obliged to fill awkward silences. With video chat, because you can see the people you are pitching to, you can ask the questions you want to ask and then leave the client to answer in their own time – all whilst you have visual connection which reduces any uncomfortable silences.

3. Showing people who you are, what you look like and how you present yourself can bring a sense of trust. The background setting also speaks volumes about what kind of person you are. Video gives your client visual cues which illustrate how you do business.

4. When fostering a business relationship, face-to-face interaction is extremely important in order to connect and gain trust. This is even more vital when asking someone for their business.

5. The added tools you gain with video conferencing software allow you to present documents and research in an incredibly simple way, to help sway your potential client.

Embracing video web conferencing provides you with a whole new way to close the deal. By adding a visual component to your sales pitch, you will find a whole new world of opportunities.

And if you are a small business with limited resources, using technology to your advantage will benefit you financially by allowing you to meet with many people without the cost of travelling.

For those without financial limitation, using video conferencing still enables you to get in there first and gain a faster response. What’s more, being able to make a pitch with the key decision makers based in several locations, gives you the power to make the best impression no matter where people are. Video conferencing also enables you to get the best panel of advisors to take part in a crucial meeting to close the deal, showing you have the right people on hand as and when your client needs them.

Video conferencing has undoubtedly crossed the boundary of simple user communication and team engagement; it has now become an important strategic tool that sales people are using all around the world to pitch and close business deals.