5 Wealth Management Strategies to Strengthen Your Business In An Economic Downturn

Most small and medium scale enterprises are under serious economic stress caused by the COVID-19 pandemic outbreak. And, while an economic downturn is scary for every business, it is nerve-racking for small businesses that might not have the same financial cushioning as large enterprises. However, the good news is that small business owner can prevent their business from collapsing in an economic downturn with effective strategies like cash flow tracking and trouncing the competition.

Let’s explore the business wealth management strategies that safeguard your business during the economic downturn in detail:

1. Prioritize cash flow:

The biggest priority for effective business wealth management is cash flow. Cash flow is the total amount of cash coming into your business versus your expenses such as bills, rents and salaries. Many businesses collapse during economic downturns due to a lack of cash flow management. Cash flow management involves keeping track of cash flow and analyzing any changes to it.

Cash flow management also serves as a critical element in ensuring that surplus funds are invested. Now the question is how to keep tabs on the cash flow patterns. You can achieve this with the help of Shootih. Shootih is a next-generation tool that offers a consolidated, analytical view of all your business transactions on one single screen. The tool provides real-time enterprise-wide cash visibility and analytical insights, thus eliminating manual processes and helping you to focus on higher-value activities.

2. Focus on the core competencies:

For any organization, its core competency refers to the skills, knowledge, capabilities and resources that constitute its “defining strength”. A business’s ability to outperform in those core competencies can give it a competitive advantage over its competitors. This also helps in carrying your business forward during economic hardship. 

During a financial crisis, it is advisable to avoid indulging in new business scopes and opportunities. Instead, try to scale back the product and service offerings you know will perform better. 

Apart from this, CEOs are obliged to look for the right investment options and growth opportunities that can help them grow their idle business cash. This means spending crucial business hours in mitigating the financial risks instead of focusing on the core competencies. However, you can overcome it with the right technology in place. Let Shootih take care of your small business wealth management, while you focus on enhancing your products and services. Shootih is a one-of-its-kind online wealth management tool that helps CEOs and CFOs drive impactful business decisions with AI-based investment insights.

3. Trounce the competition:

During a period of financial crisis or economic downturn, your competitors become a more serious threat. Every customer they win from you can make your situation worse, on the contrary, even customers you win from them can reinforce your situation. Use every opportunity to win customers from your competitors. You can achieve this by providing customers with offers and discounts or lowering the prices of your services. You can also offer complmentary services or robust customer support. 

For instance, during the nationwide lockdown in India due to the COVID-19 pandemic, orders from Swiggy shrank. However, the Indian food delivery brand evolved its model and decided on being there for anything right from sanitisers to veggies to overcome the challenges and keep their operations running.

Standing out in a way that matters to your customers will help you pave the way ahead of your competitors and prevent your business from a financial downturn.

4. Set financial plan:

It is a must for a CEO to keep a business financial plan in place as it keeps you focussed and on track as the company grows when unexpected crises hit. Lack of financial plan can be one of the reasons that lead to small business failure.

Financial plans help you communicate clearly with investors and build a modern, transparent business. Your company’s financial goals essentially include the financial section of the overall business plan. It applies real financial data, projections and critical thinking to put the financial plans in context. And most importantly, your financial plan must be forward-looking. 

One of the biggest advantages of setting up a financial plan is it helps companies navigate safely through financial fraud and economic crisis. Your financial goals should make room for losses through risky inefficiencies, expenses such as business insurance and inventory and should also set aside resources for unexpected expenses. During turbulent times, it is advisable for business owners to create several financial forecasts with different outcomes for the business such as case 1 in which revenue is expected to rise and case 2 in which there is a shortfall of revenue.

With Shootih, you can prepare for the financial goals and the investment you will need to achieve your financial goals.

5. Set Financial Goals:

To keep your business running smoothly, both profitability and growth of the business’s wealth are important. This not only helps your small business to survive but keeps it attractive to investors and analysts. Investing your idle cash in high returning investment instruments like mutual funds aids in growing the business’s wealth. Investments are made with a view of gaining returns, which grows your invested capital to a higher sum.

By investing your idle sitting cash, you can prepare for your financial goals. Also, by investing you can save and accumulate the corpus for a rainy day. Moreover, making regular investments helps you to set aside a sum regularly, thereby instilling financial discipline and back-up for the crisis.

Track, Manage and Grow Your Business’s Wealth With Shootih

Business wealth management is the most intricate task, especially for small and medium scale businesses that can’t afford CFOs and financial analysts. With Shootih, we strive to help you overcome these challenges by bringing all the crucial aspects of small business wealth management under one roof.

Shootih is an online wealth management software that offers a consolidated view of all your transactions, AI-based recommendations to invest idle cash as well as access to all kinds of mutual funds so that you can track, manage and grow your wealth on the same platform.

Not only this, the tool identifies and notifies you about the tax harvesting opportunities, thus reducing your tax liability and aids in tracking corporate goals.

Why not see Shootih in action and find how it can bring benefits to business? Book your demo today!