The financial wellness of a business refers to a company’s total financial well-being and it is one of the factors that influences business performance and employee happiness.
Companies that have sound financial wellness are in a better position to perform better for both the short term and long term. Wondering how small businesses can improve their financial wellness?
1. Focus on cash flow
Poor cash flow can cause a major setback for any business. Therefore, you need to take charge of your finances and keep track of your income and expenses using good accounting software.
You don’t need anything fancy; merely laying out your financial fundamentals in a transparent manner will help you stay on top of things and will almost certainly disclose some simple savings or optimizations you could make.
Plus, having an overall financial picture allows you to make smarter decisions based on an understanding of how they will affect your bottom line.
2. Offer a less stressful way to pay
With the pandemic and the advent of movement control in Malaysia, it was difficult for businesses to generate sales, which is why buy now pay later (BNPL) was introduced as a payment alternative in the eCommerce market.
It allows customers to pay for their purchases over time with no interest. Customers in Malaysia can now afford the things they require during this period of uncertainty thanks to the BNPL payment solution.
Customers may buy what they want today and pay in the next 2, 3 or 6 months without incurring interest, hidden fees, or debt with BNPL. It’s a more flexible method of payment, and it’s quickly becoming a component of consumers’ smart-spending plans.
Including buy now pay later in your eCommerce checkout options will boost your sales and, as a result, your financial wellness.
3. Encourage financial literacy
The most well-known brands provide significantly more than just products.
They provide value to their customers in a variety of ways, including educational content (such as how to incorporate beauty products into a holistic wellness regimen), community development around shared consumer interests, and bundled services like personal shopping and personalization. This can be done by sharing financial tips and advice on your company blog, social media, newsletters and more.
Consumers will expect their favourite brands to assist them as they strive to become more financially aware.
4. Plus-up your offerings
Small businesses are well known for their personalized service and attention to detail. Customers rarely receive a handwritten message or a special bonus with their orders from big-brand stores.
The truth is customers value these little gestures, which is why many small businesses have devoted followings. They’re a wise investment in gaining and keeping customers, and like any other investment, they should be maximized.
Explain to customers why shopping small adds value to their lives and saves them money in the long run.
When you combine a purchase with tips on how to utilize it, personalized training, VIP service, or other lifestyle perks, you’re giving your consumers more for their money and time—and that’s something to boast about.
5. Plan for unforeseen challenges
Even the most well-run business can experience downturns, whether as a result of general market conditions or unforeseen occurrences beyond one’s control.
If income and earnings dry up, a healthy company will have measures in place to rely on cash to keep the business afloat until a long-term solution is found.
It’s crucial to create an emergency fund before you need it, so consider the following options while the going is good:
- Consider applying for a low-cost operational line of credit that you can use on an as-needed basis.
- Talk to your bank about getting an overdraft or another type of revolving credit, preferably with no monthly costs unless you use it.
Financial wellness, like physical wellness, is not something that can be accomplished overnight. It’s a lifelong journey of continuous learning and adaptation that starts with a single step.
Begin with the ones mentioned above and stay agile and robust even when the going gets tough.