Entrepreneurship can be one of the most lucrative and satisfying professions. However, to be an entrepreneur, one has to face many challenging situations. Entrepreneurs have to operate their businesses under limited resources, with little or no room for errors. Financial cycles such as downturns adversely affect entrepreneurs a lot. Moreover, competitive landscapes are becoming much more difficult with the advent of technology and increasing globalisation. To sum up, the entrepreneurial journey is riskier and more challenging than ever.
However, with the right strategic decisions, entrepreneurs can overcome various financial risks to their business and become immensely successful. Here are ten tips to help every entrepreneur steer their business to success in a challenging business environment.
Develop an agile business
An entrepreneur needs to be constantly aware of everything happening in the business environment. Whether a municipality election or an international war, a business can be affected positively or negatively by various factors. Entrepreneurs can develop an agile business that takes early advantage of business opportunities or cuts losses during potential crisis times by staying abreast of their business environment. For example, many small businesses switched to trading COVID-19 essential goods during the pandemic to survive and offset the losses of their primary businesses.
Ensure upskilling and re-skilling of employees
Great teams build successful businesses. However, we live in a world where technology rapidly changes industries overnight. Entrepreneurs need to encourage their workforce to constantly upskill and reskill to keep their businesses relevant in these uncertain times. With the help of various online business startups, a successful entrepreneur upgrades the workforce to stay in tune with the changing circumstances.
Focus on data management
Data management and analysis is an area that has proved to be the weakness of many small and medium-sized businesses. Many successful business people are simply not aware of the importance of data or how to use it to create advantages for themselves.
To succeed, aspiring entrepreneurs must deploy data management applications to perform crucial data analysis for their businesses. Data management applications often require dedicated Internet services. Entrepreneurs can take advantage of services such as Airtel’s Internet Leased Line to ensure their business is always on top of data management.
Leverage is a concept many entrepreneurs simply do not understand well. Yes, it helps to grow businesses fast in times of rapid economic growth. However, excessive leverage can completely break a business in a downturn or crisis. Entrepreneurs need to be careful with using leverage and should always opt for leverage based on their actual cash flows rather than the projected cash flows. Entrepreneurs can take advantage of new-age funding techniques such as angel investing, venture capital and revenue-based financing. These funding methods involve equity or revenues and do not create a permanent liability on the business like leverage.
Enable remote work
The pandemic has taught us to manage a business successfully by having completely remote teams. With the help of powerful video and teleconferencing applications enabled by reliable Internet providers such as Airtel Office Internet, companies can seamlessly work on a remote basis. This helps them cut down office rental costs and use the freed-up cash flow for growing sales.
Avoid dependency on one or few sources of revenue
Many business owners get comfortable with one or few sources of revenue. They rarely try to seek newer sources of revenue. Dependency on a few sources of revenue or customers becomes very risky, especially if such sources switch to the competition suddenly.
Practice efficient working capital management.
One of the major sources of financial risk for any small or medium-sized business is a prolonged account receivable period. In India especially, it is a commonplace for small and medium-sized businesses to give lenient credit to their customers. Entrepreneurs can avoid this risk by limiting the extent of credit terms and not over-exposing themselves to risky debtors.
Besides prolonged accounts receivable issues, businesses also suffer from faulty inventory practices. Inventory can drag the working capital, especially if it lasts for several months. Businesses should cut their losses by monetising their long-term inventory holdings and using the funds for new product batches.
Implement sound legal compliances
Entrepreneurs, especially startup entrepreneurs, often underappreciate the importance of legal compliances. This often causes issues, especially if the authorities take penal action against them. Resolving such compliance issues with the authorities can be a drag on the entrepreneur’s focus and resources. Thus, entrepreneurs must have sound legal compliance practices in place so that they can focus only on what matters – growing their business.
Many Indian entrepreneurs ignore the opportunities for growing their sales abroad. They stick to either preferred domestic customers or a few select international customers. International expansion means sending teams abroad, which can be costly and difficult for many small and medium-sized businesses. However, with the help of communication services such as Airtel Corporate Postpaid, businesses can send teams abroad and communicate with each other using inexpensive international roaming.
Focus on online business channels
In recent years, online channels such as Google and Facebook have enabled many businesses to grow their sales exponentially. Businesses can use these channels to run relevant ads to acquire new customers. Businesses can also utilise influencer and content marketing techniques to boost awareness of their brand offerings amongst millions of Indians.
By implementing these tips, an entrepreneur is poised to go a long way to mitigate financial risks to their business. The entrepreneur can acquire new customers, keep costs at bay and seek funds the right way to ensure their business can withstand any challenge in the long run.