How to Add Greater Strategic and Financial Flexibility to Your Business
By Rilind Elejaz
Companies available on the internet made a profit during the pandemic year. Bravo to them, but they are not the real heroes. The real heroes are those who created robust systems that helped them weather the storm, even though no one expected a pandemic to happen. Some companies folded. The real heroes survived. The year 2020 taught everyone a valuable lesson. It taught the importance of being strategic and building the financial flexibility of your business. A strategy is an action that managers take to attain one or more of the organization's goals. Strategy can also be defined as a general direction set for the company and its various components to achieve a desired state in the future. Companies with financial flexibility can withstand pressure in an unexpected situation and may even make profits. This means they can come up with cash as needed without experiencing any adverse effects now or in the future.
Below are five ways in which you can add greater strategic and financial flexibility to your business:
- Office Renting: One of the ways that you can ensure greater financial flexibility is by renting the appropriate and practical office space for your brand. The use of suitable renting options will add flexibility to your business. There is a wide variety of office spaces that you can rent in Nashville. The financial officer cannot make a better decision in finding a suitable office space in Nashville. With relatively affordable rent compared to other metro areas, getting a good office renting space is a priority if you live in Nashville. If you get a great space, it will be favorable to your company's bottom line at the end of the year.
- Using your revenue judiciously: An excellent way to judge the use of your revenue judiciously is to assess how much investment your company has made in 18 months. To make a profit at the year’s end, you can make a move to ensure financial flexibility by not focusing on fashion or expensive taste when it comes to office décor. Many young companies have squandered their profits on cash bonuses and salary increases when they could have focused on growing their cash reserves. The solution is to create a balance. Create cash reserves so that you can give bonuses and ensure overall growth while remaining committed to making sound business decisions.
- Build a smart budget: Budgeting is vital to the health of any business organization. Achieving financial flexibility only happens if you are serious and detailed in your budgeting skills. Get a detailed budget that talks about where every single dollar is going. Then you can optimize your revenue and minimize expenses. This will position your business to make the investments needed to make a sustainable profit. Avoid the expenses that add up to ensure that your business uses money within the budget. The budget will fluctuate, but if you plan, you will always have a healthy profit margin if you plan. This will improve the financial flexibility of your business. Invest only in areas that are needed, it is understandable if you decide to invest in software solutions but don’t overdo it on other grounds.
- Be strategic with financing: Only a few organizations can boast about being debt-free. The goal is to make strategic use of debt. You want to be able to access funds that will not require you to pay interest on them. Many companies use a business line of credit because it aids in cash flow, and you can use it as an insurance policy should a financial emergency arise. Do not miscalculate your need for credit. Make estimations and calculations to decide what situations can arise that require you to use the funds you can access via your line of credit. This will help determine the highest amount you need in an emergency. Engage a loan broker to help you access credit.
- Expand revenue streams: Focus on revenue creation in your business. If you can find a way to increase the activities that produce revenue, it will improve the optimal flexibility of your finances. You can also find a way to expand your revenue streams to fortify your company so it will be able to sail through stormy weather. Brands that had flexibility in their business models survived the financial crisis. They gave value to many different demographics and customer segments. A broad customer demographic is an advantage that keeps your company stable over time.
One of the key strategies you should employ is the leasing office space in Nashville. This would boost your financial flexibility and strengthen your company’s foundations. Remain focused on today and seize opportunities, expected and unexpected. Having flexibility will build a strong foundation, and a strong foundation will increase your chances of profit and longevity.