Running a small business has never been for the faint of heart. And with higher fuel, shipping and operating costs continuing to impact businesses, many owners are looking carefully at every dollar.
The good news? There are still steps you can take now to strengthen your business, protect cash flow and enter the new year on firmer footing.
1. Take a fresh look at your cash flow
Don’t wait until your bank balance gets tight to look at the numbers. Review what you expect to come in—and what needs to go out—over the next 30, 60 and 90 days.
Pay particular attention to upcoming expenses such as inventory, payroll, taxes, insurance and seasonal costs. A simple cash-flow forecast can help you identify a potential shortage before it becomes an emergency.
2. Know what is really costing you more
Gas may be the expense you notice most, but higher transportation costs can ripple through your business in other ways—from deliveries and supplies to vendor pricing.
Review your major expenses against what you were paying six or 12 months ago. Look for subscriptions you no longer need, products with shrinking margins and expenses that can be renegotiated.
Small savings across several categories can add up.
3. Revisit your prices—and your profit margins
Many business owners are reluctant to raise prices, particularly when customers are watching their own budgets. But keeping prices artificially low while your costs increase can slowly erode your business.
Instead of automatically raising every price, look at your products and services individually. Which are profitable? Which take considerable time or expense but generate little return?
A modest adjustment—or changing how a service is packaged—may be enough to protect your margins without alienating customers.
4. Get paid faster
If customers owe money, now is a good time to review outstanding invoices. Send reminders. Make invoices easy to pay. Consider requiring deposits on larger projects or shortening payment terms for future work.
Sales are important, and so is cash in the bank.
5. Be careful about using credit cards
When cash gets tight, quick financing can be tempting. But not every source of capital is created equal.
Before using credit cards, merchant cash advances or other high-cost financing, understand the full cost and repayment terms. Talk with us or financial adviser about whether more affordable options may be available.
Ideally, seek financing before your situation becomes urgent. Having organized financial statements and a clear understanding of how much money you need—and why—can make you better prepared to speak with a lender.
6. Use the fourth quarter to prepare for 2027
You don’t need a complicated strategic plan. Ask yourself three simple questions: What worked this year? What cost more or produced less than expected? What is one thing I want to do differently next year?
Then turn the answers into a basic 2027 budget and cash-flow plan.
A challenging economy doesn’t mean your business has to stand still. Sometimes finishing strong means protecting what you’ve built, understanding your numbers and making small adjustments now that give you more options later.
Our loan officers are available to answer questions. There are also other free or low-cost resources available, the New Mexico Small Business Development Centers, SCORE, SCORE mentors, or other small-business resource can help you evaluate financing, cash flow and your next steps.
RESOURCES
Mastering Cash Flow Management — SCORE
Pricing With Confidence — SCORE