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It can be hard for a small business to reach profitability in a very short period. Additionally, unless a small business becomes profitable, it may be difficult for them to reinvest in their existing product and services, or engage in new products and service that can increase both customer base and loyalty. Hence, achieving profitability in a benchmark period can be critical for small business success, and future going concern needs.

For any small business that has recently started operations, and is looking to become profitable, the following tips can be of great essence.

Making Operations Efficient

Business operations and processes are the primary reason that can lead to outstanding products and services that customer may like to purchase or continue to invest in. For this, small business should do an administrative audit that can help make processes effective and efficient.

Engage in Customer Relationship Building

Small businesses can only increase profits when customer remain loyal and are retained. For this, long-term relationship building is important. This can be achieved by giving giveaways, gifts, and periodic discount to new and returning customers. Small businesses should also increase their referral programs, which provide customers with an incentive to introduce their friends and family to products. Another area is to provide loyalty cards and provide retention or loyalty points that increase discounts, or delivery of products or services on priority.

Increase Visibility

Visibility can be increased through social media marketing, as well as strategic business corporations. Strategic Business Corporation involves partnerships with and endorsements from other brands. Investing in marketing channels can be the key to and use of Customer Relationship Management (CRM) software can be crucial. 

Manage Cash Flows

Cash flow management involves achieving a balance between income and expenses. Healthy cash flow can provide a small business with leverage to reinvest cash in new products while saving it for risky situations. Customers can be given the incentive to pre-pay for services and products, helping increase business cash flow for operational efficiency.   

Continue Innovation

Every small business should be aware that products and services have a lifecycle. When they reach the end of the lifecycle, a product or service needs innovating. Continuous innovation of products and business plan is critical for sustainable profits and reinvesting in business success. 

Small business should above all remain patient, and continue monitoring their cash flow and expense reports to ensure they have enough assets to offset liabilities in present and future. 

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