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5 Ways Small Businesses Can Prevent and Recover from Income Loss

— June 2, 2021

The more touchpoints you create and sell through, the more conversions you’ll generate, and the more revenue will come your way.

The last year has been a difficult one for small business owners, and even though 2021 is expected to be better in many ways, there’s no denying that there are still many perils on the road ahead. Now more than ever before, it is imperative to prepare for potential financial setbacks to minimize the damage or eliminate the risk altogether. That said, when financial loss does occur, you want to bounce back in a realistic and manageable timeframe before you have to lay people off or worse, close your doors for good.

If you want to prevent this type of disaster in 2021 and the years to come, you need to know how to prevent financial loss, prepare for setbacks, and regain your financial footing in the market efficiently and effectively. To that end, today we are talking about financial control and security during difficult times and how you can prevent the worst scenario from ever happening.

Invest in automation ahead of time

If you are currently financially stable, now is the perfect time to invest back in your business. There are many ways you can invest in your own company to support its growth, solidify your position in the market, and boost productivity and output. Of course, you can’t invest in everything at once because over-investing exposes you to a lot of immediate and long-term risk. Instead, you want to make specific, strategic investments. 

Without a doubt, one of the best investments you can make is investing in automation. Automation comes in various forms, depending on your industry, niche, processes, and goals. For an office environment, investing in the right software solutions can minimize ongoing costs, boost communication and collaboration, and automate repetitive tasks to lessen the financial strain.

In a manufacturing facility or any business handling physical goods or manual labor, investing in hardware automation like robotics and automated equipment is the best way to minimize hazards and risk. It’s also a great way to boost productivity, and ultimately bring more money to the business while minimizing expenses. 

Explore additional revenue streams

Revenue diversification should be one of the top priorities for small business owners looking to ensure financial security and to elevate their financial standing. If you want to grow in the months and years to come, you need to improve revenue, but instead of pushing for more income through your primary revenue stream, you should be looking to tap into other lucrative streams in order to create a big financial safety net. So, if one revenue stream goes dry, you have the other ones to hold you over.

It sounds simple enough when you think about it, but many small business owners are so overwhelmed with the challenges of running their companies that they don’t have the time to develop these new revenue opportunities. Well, there’s no putting it off anymore, because the pandemic can quickly end a small business without a fallback plan. Run a financial SWOT analysis, identify the opportunities for sales, and invest in these channels before it’s too late.

Get the right business insurance

Image by Medienstürmer, via
Image by Medienstürmer, via

Nowadays, every business, big or small, needs to have the right insurance as part of disaster recovery and a way to prevent financial setbacks. During the pandemic and these trying times, opting for the right business insurance protection that is specific to your needs, goals, and industry is paramount for survival in 2021 and the years to come. 

From securing the contents of your office or facility and getting cyber insurance, and all the way to the basic business interruption coverage, you need to find an insurer that can help cover your business across the board. When disaster strikes, your insurance will keep you going and allow you to stay afloat until you regain your financial standing. It can mean the difference between growing in the new year and closing your doors for good.

Follow industry price points and adjust

It doesn’t matter if you’re looking to protect yourself from potential financial loss or if you’re currently trying to recover from it, monitoring industry price points and staying flexible is the way to achieve both. During these trying times, you need to stay on top of the pricing trends in your industry and adjust your prices to remain competitive but also solvent.

Adjusting your prices can help you regain your financial standing, and it can help you secure your financial position for any economic downturns in the long term. 

Invest in omni-channel sales

Lastly, creating omni-channel experiences for your customers is another powerful way to prevent a financial downfall and recover from one as well. People nowadays want to be able to buy products and services on their own terms, meaning that you need to be able to sell across all customer touchpoints. 

The more touchpoints you create and sell through, the more conversions you’ll generate, and the more revenue will come your way. Be sure to optimize your sales for online and offline selling across a variety of channels and you will have no problem growing your revenue streams and preventing financial setbacks in 2021.

Wrapping up

Many small businesses have had to close down for good in 2020, but if yours is still alive and kicking, the time is right to take matters into your own hands. Use these tips to secure your financial standing, improve your cash flow, and secure your business from any interruptions and disasters that may lie in wait.

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