Doug Arms is Vice President for Kelly Services Finance & Accounting Product and Kelly Financial Resources. The company provides accounting and finance talent to Fortune 100 companies through small businesses.
Arms has been in the staffing and employment industry for 20 years and is the employment expert on FOX in Tampa. As far as Arms is concerned, he states that small businesses can benefit from a few key things in respect to finance. He states, “Differentiation can often originate in running a smart, efficient business. Small businesses can struggle to compete with the favorable pricing of larger companies, however, inefficient operations can cripple a small business.”
Arms shares his financial insights and business expertise to help small businesses succeed with these five tips.
(Photo courtesy of Doug Arms)
Business type. Understand the best form of business for your small business — sole proprietorship, partnership, S corp, LLC, etc. This will make sure that your structure matches your liability level and tax preferences-advantages.
Credit cards. The impact of credit card use on a small business can be significant even if this hovers around 3 percent of revenue.
Website presence. A great website-web presence is the great equalizer in business, where small companies can appear larger and more sophisticated or simply have the image they want. It is important to get professional help with a website if the business owner does not have the expertise in building and maintaining a website.
Keep the customer in the forefront of decisions. If you are a product-oriented small business, returns are a great policy but can be costly. Spend the time you have as a small business to consult with your customers whenever possible to ensure they are getting what they expect. Create servicing options that you can monetize. For instance, small music stores should provide repairs and lessons, even online options for group lessons. Ratchet down your inventory to keep cash in your till until you need product.
Days sales outstanding. Understand the cost of capital, especially when taking on debt to finance your operations. This is most important with respect to getting paid if you are a vendor. DSO has a major impact.
This article was written by Michelle Guilbeau for Small Business Pulse