Wednesday, 26th April 2023 | Marketing,Management
7 ways how AI empowers small businesses to achieve more in less time
As a small business owner, you understand the value of time and the challenge of balancing multiple responsibilities each day. With the emergence of artificial intelligence (AI), small businesses can now achieve greater efficiency and productivity. SMBs can compete in today's fast-paced, technology-driven economy by leveraging AI.
What is artificial intelligence (AI)?
AI is a revolutionary technology that enables SMBs to automate tasks, predict trends, forecast demand, improve decision-making, streamline operations, and scale up. With advanced AI models like Stable Diffusion, DALL-E 2, and GPT-3, and the emergence of AI-powered products like ChatGPT and GitHub Copilot, we can now utilize technology that was once considered exclusively human.
In this blog, we will explore the benefits of AI for SMBs and how you can gain a competitive advantage in your respective markets by optimizing operations and maximizing output with minimal resources.
1. Automating Repetitive Tasks
AI-powered tools can automate time-consuming tasks such as data entry, invoicing, and email management. This frees up valuable resources that can be redirected toward high-value activities, such as strategic planning, customer engagement, and product development.
2. Improving Customer Experience
Chatbots and virtual assistants can provide customers with quick and accurate responses to their inquiries, improving their overall experience with your business. Additionally, it can analyze customer behaviour and preferences to personalize marketing efforts and provide targeted recommendations, further enhancing the customer experience.
3. Improving Decision-Making
SMBs are frequently required to make critical decisions that impact the trajectory of their business. AI-powered tools can enhance your decision-making by providing real-time insights and analytics. For example, an AI tool can analyze sales data and identify trends, empowering owners to make data-driven pricing, promotions, and product development decisions.
4. Predicting Trends and Forecasting Demand
AI-powered tools can help you predict trends and forecast demand. By analyzing data from various sources, including social media, sales history, and online reviews, AI has allowed you to identify emerging trends and help your SMB adjust strategies accordingly.
5. Enhancing Marketing Efforts
AI can also help enhance marketing efforts. Analyzing customer data that will identify the target audience, create personalized marketing campaigns, and predict which marketing strategies will most likely be effective.
6. Enhancing Cybersecurity
With the rise of cyber threats, SMBs can use AI to strengthen their cybersecurity measures. AI-powered tools can detect and prevent cyber attacks, identify vulnerabilities in systems and networks, and provide real-time alerts to potential threats. This helps SMBs protect their sensitive information and prevent costly data breaches.
7. Improving Decision Making
Lastly, AI can help improve decision-making by providing data-driven insights. AI-powered tools can assist you, and your managers in making well-informed decisions regarding crucial aspects such as hiring, resource allocation, product development, and pricing.
Customer retention best practices for your small business
In 2023, the business landscape will be more dynamic, with constantly evolving trends and changing customer demands. You can keep your customers engaged and returning for more with the right strategies. Here are some invaluable customer retention best practices to help you stand out from the crowd and keep your customers coming back for more:
Embrace Omnichannel Sales
The pandemic accelerated the shift to online shopping, and customers are now more comfortable than ever buying online. This means providing a seamless experience across all channels, from your website to social media platforms, mobile apps, and online marketplaces. Investing in innovative technologies such as AI and automation can deliver personalized and efficient products that set you apart from the competition.
Use Social Media to Build Relationships
Social media is a powerful tool for building relationships with your customers. You must use social media to build a community around your brand, engage with your customers, and create meaningful relationships. By actively listening to your customers and responding to their queries, feedback, and concerns, you can show that you care and establish trust. Furthermore, social media allows you to showcase your brand's unique personality and values, which can help you stand out from the competition. Sharing customer stories, testimonials, and reviews can also be an effective way to humanize your brand and build social proof.
Leverage Data Analytics
Data analytics can help you understand your customers better and identify opportunities to improve customer retention. You can identify opportunities to improve customer retention and create personalized experiences by tracking customer behaviour, preferences, and feedback. Investing in data analytics tools can help you make data-driven decisions and optimize your marketing and sales strategies to meet your needs.
Be Transparent and Authentic
Customers are increasingly demanding transparency and authenticity from the brands they do business with. Customers are looking for open and honest businesses about their practices, policies, and values. This requires being transparent about pricing, shipping, and returns policies and using authentic and inclusive marketing messages. Doing so can build trust with your customers, which is essential for long-term loyalty. Customers are also more likely to recommend businesses they perceive as transparent and authentic.
Focus on Customer Experience
Customer experience will be a major differentiator for small businesses. As a small business owner, providing exceptional customer experience across all touchpoints should be a top priority. This means investing in customer service training for your staff, optimizing your website for usability, and gathering customer feedback to improve your products and services continuously.
These customer retention best practices can help your small business to stand out from the competition, improve customer loyalty, and grow your business. By embracing omnichannel sales, using social media to build relationships, leveraging data analytics, being transparent and authentic, and focusing on customer experience, you can create a loyal customer base that will continue to do business with you and recommend your brand to others.
Sales ,Marketing ,Management
What is a bad debt expense, and how to calculate it?
What is a bad debt expense?
When a buyer doesn’t pay in full, you can make a note of the amount you’re unable to recover in your business’ financial record. This is a bad debt expense.
Unfortunately, dealing with non-paying buyers is a common problem among small- and medium-sized businesses in Canada. The best way to protect yourself is to accurately record your losses to contain the damage.
Why should I keep track of bad debt expenses?
When you invoice a buyer for their purchase, it’s recorded as a sale in your books. If you’re not paid for that transaction, your overall revenue is actually less than indicated by your accounts–and you have to pay tax on your revenue. When you record unrecovered income as a bad debt expense, you officially remove all or part of that sale from your revenue which means that you won’t have to pay tax on it. This is entirely fair and legal–you don’t pay tax on income earnings you never received.
How to calculate your bad debt expenses
There are two ways to calculate bad debt expenses: the direct write-off method and the allowance method.
With the direct write-off method, you simply charge the amount of the unpaid invoice to the bad debt expense. This removes the amount from your accounts receivable, reducing your taxable income. This is the simpler method and the most commonly used by Canadian businesses.
5 Strategies for Growing your Business
What can I do to start developing a plan for growth?
Deciding to grow your business is a big step, so take a moment to congratulate yourself. Now, let’s get to work. The first thing to do is to develop a plan, and these five strategies can help.
1. Take care of your cash flow
Just for everyday operations, businesses need to have a steady flow of capital coming in and going out, but the importance of your cash flow intensifies when you’re planning to expand.
Survey your income and expense reports to determine your current cash flow, and identify trends so you can estimate how much you’ll have in the future. Don’t stop there. Make sure that you return to this information regularly to ensure you remain on the right path.
Should you find yourself in a cash flow crunch, you can consider a business line of credit so you can continue to take care of your responsibilities. Alternatively, you can take out a small business loan.
2. Invest in marketing and sales
It’s common for sales and marketing costs to fall to the bottom of a small business’ priority list, but they’re an absolutely crucial investment, especially if you’re expanding. Bear in mind that marketing and sales strategies and tactics can be tailored to your business’ unique needs, so you’ve got a variety of options to choose from–all with different budgets. Consider your audience, sales goals, and business forecast to build regular (think monthly) marketing efforts into your long-term plan. Marketing your business is an investment in its success.
3. Attend to your core audience while attracting new customers
Expansion often involves courting new customers, weather from different market segments or simply additional regions. It’s important that during the growth process resources and attention aren’t stolen from your core customers. They’re the ones who got you here, after all.
One way to give everyone the attention they deserve is to break your audience (and marketing dollars) into distinct segments and sell each according to their wants. Be open to different configurations. For example, depending on the situation you might want to serve everyone under a single brand, or develop distinct brands for different segments.
4. Confirm your supply
Few things can turn customers away faster than hearing you don’t have the products or services they need. Supply chain issues and slow delivery since the pandemic have put an increasing number of businesses in a precarious position when it comes to meeting customer demands, so your expansion plans should include the establishment of relationships with multiple reliable suppliers. Your efforts in advance demonstrate good business practices and respect for your customers. Plus, positive relationships with multiple suppliers can help you with your expansion goals.
5. Ensure quality and consistency
It should go without saying, but the last thing you want to happen when you expand is to have your quality or customer experience decline. Plan against this by establishing production, operations, and customer service standards. .
You have a better chance of expanding successfully if you plan carefully in advance. Attend to your finances, marketing, suppliers, and customers in advance to make sure you’re growing on a solid foundation.
Speak to an iCapital advisor about small business loans or lines of credit to ensure steady cash flow during your expansion process.
Marketing ,Accounting ,Management
What Is Working Capital and Why It’s Important In Your Business
What Is Working Capital?
When your company needs products or services in the short-term, you use working capital to pay for it. Unlike cash flow, which refers to money going in and out of the company, working capital is a snapshot of a company’s financial health. You can figure out what your company’s working capital is by looking at the value of your company’s assets minus your liabilities. This is the amount of money you have on hand to meet immediate expenses–in other words, your working capital.
Why is it important?
It’s obvious that a company should have the working capital it needs to pay its employees and purchase inventory, but your available working capital is also a good measure of your company’s overall financial picture. If you have access to sufficient or even plentiful working capital, you can rest assured that you have the resources to manage your upcoming expenses. If your working capital is low, you can run into problems.
Additionally, working capital is essential in helping businesses maintain and grow their operations in the future. With enough working capital, a business can cover its expenses even if there are outstanding payments from customers. In the best-case scenarios, businesses can use extra working capital to reinvest in their operations by buying additional inventory, launching marketing and promotions, and hiring additional staff.
Every business should strive to have ample working capital, but this can be a challenge, particularly in times of economic downturn.
4 Tips To Improve Your Working Capital
1.Get a Cash Flow Forecast
It’s easier to get where you want to be if you have a clear picture of where you are. A cash flow forecast is a financial projection that shows how much money your company can expect to receive and when. Make sure you look at revenue, expenses, and net cash. With this information, you can make better, informed decisions about spending.
2.Automate Business Processes
Your working capital relies on receiving payment, so it makes good business sense to streamline the invoicing process. Using an automatic invoicing system, particularly one that’s tied to the delivery of your product or service, will free up time and, importantly, ensure your invoicing isn’t delayed due to busy employees or time constraints. The ability to track your invoices can make your working capital more predictable, which will allow you to make educated decisions about spending.
If you run a small- or medium-sized business, you’ve experienced late payment, or even worse, no payment at all. Following up with outstanding invoices is time-consuming and frustrating, so it’s smart to bake in incentives for customers, suppliers, and vendors who meet their obligations. Incentives could be monetary or symbolic in nature. The idea is to encourage good business practices while fostering positive relationships.
4.Improve Inventory Management & Avoid Stockpiling
Inventory management is the process of matching your company’s inventory to expected sales. The trick is to make sure you have enough–but not too much. Stockpiling inventory is expensive, and money tied up in overstock can’t be spent on more immediate needs. Consider investing in a digital solution.
Access to sufficient working capital is a great indicator that your business is healthy, and a healthy business is one that’s positioned to grow and take on new opportunities.