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Eliminate 5 Weaknesses to Create Success in SME

Starting your own business Especially small businesses Full of challenges And many obstacles To come together to create a headache for us continuously And problems or obstacles in matters related to finance It is something that is difficult to avoid.

If thinking of going down to do business seriously Many businessmen who fail in the SME business despite their start-up of business with brilliant ideas Offering a very attractive product or service But unable to lead their own business to survive Just because of lack of experience And knowledge and ability in financial management.

Remember to keep in mind one thing. You will definitely be faced with these challenges if you want to pursue your dream of being a successful business owner, so learn to tackle them. Financial management is the cornerstone of doing business. If the foundation is strong, other work can continue. We will come to learn the flaws. Or the major weaknesses that often occur with retail investors. 5 things to take as a guideline and apply to your own business.

1. Insufficient cash flow
Many people started their business by setting up a project. Like drawing a castle in the air And they often have too much expectations for profit and business progress. While underestimating investment costs Therefore, there is often a problem of cash flow management. Between the revenue from sales With cost May your sales be good. There are positive numbers in the account. But in practice it may lack liquidity. Or insufficient cash flow Because there are many expenses that we have to reserve first. While having to wait for the revenue collected from customers later Even if customers default on payment of products and services The cash flow problem will definitely become a big deal.

When successful in business Want to expand business Will face the same problem Need to be prepared for an increased investment To support the expanding business Of course, the income and profits will have to increase. But before that point Must be prepared for investment And cash flow So as not to cause jammed problems It is similar to the beginning of the business.

Another important thing that I would recommend doing. Is the estimate of income and expenses Estimates are not bookkeeping. But it is a pre-assessment of the financial status. Anticipation It will help you to prepare sufficient funds to reserve. In the event that the revenue from sales falls Or have an additional cost Another thing to do is Collect invoice documents for expenses, assess and analyze spending at least every 3 months to anticipate whether expenses will increase or decrease in the near term.

2. Having trouble finding investment loans
Applying for investment credit Or used as working capital in business It is another issue that SME entrepreneurs often have problems or obstacles that make it difficult to access loan sources. Sometimes it turns out to be a bad joke. That when our business is going well Excellent performance There is no liquidity problem in business operations. It turned out to be a time when loan sources and financial institutions were ready to approve investment loans. Which during that time May not be necessary to use the service much. Unlike the time when businesses began to have liquidity problems at that time, it became very difficult to find a source of loan to fix the situation. Or sometimes almost impossible.

So good way Doing a small business where we do not have a large reserve. We should plan and look at avenues for loan sources. To be used as a reserve for an emergency Prepare to be ready Even if you haven't used it yet, be prepared for that. One day it may be necessary to use it. Study details of funding sources from various financial institutions, each of which has its objectives. And subtleties that differ Choose a place that suits our business. Manage it successfully since our business was going well. Time to use it up, business will not be interrupted.

3. It does not separate spending accounts between personal and business accounts
Separating the business income and expenses account from the personal expense account. It is very necessary and deserve to be done. But is often ignored Especially small businesses And the business owner is the accountant himself A long time becoming a fussy matter No time to sit separate accounts Think easily that the same bag will lose. Therefore, it becomes impossible to see what parts are spent, and it is best to separate them clearly. Either a bank account, a credit card, or a check makes use of Even if it is a small expenditure Accounting clarity is even more necessary. When your business is in the form of a venture Or have a partner Unclear account It has been the cause of many conflicts of business partners.

4. Storage defects Expense record
Wrong recording of income and expenditures Or not detailed enough It will make you lose the opportunity to make money. Or cause damage Listing of additional material costs Or increased wages For a period of time Should be prepared in accordance with the income recognition account. Due to all costs added Should influence decisions In determining the prices of our products and services always.

In the event that we are not the accountants themselves You should find time to verify your account yourself. At least once a week Check to make sure that income and expense details are correct. And nothing is wrong Emphasize to do a manual check. Erroneous accounting Whether it was caused by willfulness or not This is the reason why small businesses such as SMEs have become collapsed.

5. Improper pricing
Pricing products or services Sometimes it is quite difficult. Thinking too expensive can not be sold against competitors. Think too cheap, there is not enough profit or loss.

Most SME businesses, especially those starting out Often the price of goods and services is lower than the market price Because we think that thinking is cheap Will be able to quickly bring the business into the competitive market Sometimes new business people who do not have the expertise or detail enough in accounting. Forgot to save some expenses It made the cost calculation a mistake. Resulting in the price Or service charge Cheaper than it should be.

Employee wages Office or location rental Vehicle maintenance, marketing fees, and other expenses Record every expenditure before summarizing the actual costs. Set the prices based on the costs of running your business. And compare it with competitors' prices Analyze the price structure and mechanism from the source. Find the right price point for your products and services. Not necessarily, don't undercut your competitors.

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