An accountant I know gave me these great rules that I pass on to you to ensure your business will not only survive but thrive. They are five golden rules for the survival of any business.

1. Put a realistic value on the goods or services you are selling. Don’t sell yourself too cheaply. People are paying you for value – give them what they want. Think of how you can keep the costs of materials down to the lowest possible price. Buy low, sell high. Keep labour costs low. In short: maintain a high gross margin.

2. Keep the fixed costs of your business to a minimum: the rental, the level of interest you have to pay. Look at renegotiating and repackaging existing loans for maximum benefit to your business.

3. Get a worthwhile return.
(a) Get a return on your value to the organisation. If you had to employ someone to do what you’re doing, you’d have to pay them ‘X’ number of dollars. Pay yourself at least the same amount.
(b) Get a return on the money you’ve invested in the business. If you could get more of a return by investing elsewhere, then you’re wasting money.

4. Don’t run out of cash! Keep strong control of debtors, levels of stock and work in progress. Shorten the manufacturing cycle to the shortest possible time to get swift returns. Don’t tie up cash in idle products.

5. Plan! If you plan your future in the short term, the medium term and the longer term then you can take advantage of opportunities that may arise. By planning you can limit the potential for damage and tap into new markets. The way to succeed is to know your level of resources (current and expected) and use them to the best possible opportunity.