Economic Strategies for Small Businesses

34% of SMBs have only a month or less of cash reserves. How do we address this critical issue? Here are 10 essential cash management rules: 1. Understanding Cash Metrics: Focus on operating and free cash flow, not just profits. 2. Building Cash Reserves: Maintain enough cash to cover 3-6 months of payroll, slow months, and unexpected equipment costs. Be cautious in volatile industries. 3. Analyzing Beyond the Bank Balance: Use weekly financial reports instead of just checking the bank balance to better understand cash obligations. 4. Efficient Invoicing: Invoice immediately and manage accounts receivable proactively to ensure quicker payments. 5. Strategic Payment Scheduling: Don’t rush to pay bills; optimize payables for better cash flow and maintain good vendor communication. 6. Inventory Management: Treat inventory as an investment and balance stock levels to avoid cash tie-ups. 7. Growth and Cash Flow: Manage growth carefully by securing credit in advance and understanding the cash conversion cycle to prevent cash shortages. 8. Tax Planning: Treat taxes as a critical expense and work with a knowledgeable CPA to plan for tax implications. 9. Prudent Use of Debt: Use debt strategically to support growth and investment, and maintain diverse banking relationships. 10. Maintaining Flexibility: Develop a flexible business strategy that includes multiple suppliers and cross-trained staff. These strategies can help SMBs manage their cash flow more effectively and safeguard against financial crises. If you want to go deeper, I wrote about this in my newsletter. Please read and subscribe: https://lnkd.in/gP4KXvDU

For many small and medium enterprises (SMEs), managing account receivables is a persistent challenge. In a recent conversation with Harshal Banker, we explored common mistakes businesses make when it comes to pending payments and actionable strategies to overcome them. Here are the key insights: 1. Specify Due Dates, Not Just Credit Days One of the biggest oversights is mentioning credit terms (e.g., “45 days”) on invoices instead of a specific due date. Harshal highlighted how this ambiguity leads to delays, as customers rarely calculate deadlines themselves. A clearly stated due date removes guesswork and sets expectations upfront. 2. Send Reminders Before the Due Date There’s a misconception in SMEs that they can’t approach customers about payments until the credit period has lapsed. This leads to unnecessary delays. Harshal compared this to credit card companies, which send soft reminders a few days before payments are due. Proactively reminding customers ensures they’re aware without feeling pressured. 3. Implement Flexible Pricing for Credit Terms Harshal shared a game-changing practice: differentiated pricing based on credit periods. For one of his clients, invoices were revised to reflect a higher price if payments weren’t made on time. This incentivized timely payments while creating accountability. 4. Don’t Be Afraid to Ask for Your Dues Many SME owners hesitate to request payments, fearing it may strain relationships or lead to lost business. Harshal offered a refreshing perspective: if a customer refuses to pay and threatens to stop future business, they’re not worth keeping. True partnerships are built on mutual respect, including honoring payment agreements. The Takeaway Managing receivables isn’t just about chasing payments—it’s about creating a system that prioritizes transparency, accountability, and mutual trust. By adopting clear due dates, proactive reminders, flexible pricing, and a confident mindset, SMEs can overcome payment hurdles and maintain healthier cash flows. What’s your approach to managing account receivables? I’d love to hear your experiences and tips in the comments!

Are You Spending Too Much to Acquire a Customer, Or Not Enough? E-commerce brands often focus on lowering their customer acquisition costs (CAC). But what if cutting CAC is actually hurting growth? The real question isn’t just how much does it cost to acquire a customer? It’s how much should you be spending? If you knew with certainty that a customer would generate $500 in long-term profit, would you hesitate to spend $100 to acquire them? Probably not. But many brands take a one-size-fits-all approach, capping CAC at an arbitrary percentage of their first purchase revenue. This can lead to underinvestment in acquiring high-value customers and overinvestment in customers who won’t stick around. A better approach is to align CAC with long-term customer equity, not just at a blended level, but dynamically across customer segments. Some customers have significantly greater revenue potential than others. The challenge is identifying which customers will create sustainable profitability over time. The chart illustrates that customer acquisition cost (CAC) and lifetime value (LTV) are not linear, spending more on acquisition can lead to higher-value customers, but only up to a certain point. Key Insights: There is an optimal CAC range. - Spending too little on CAC (left side of the chart) may result in acquiring lower-value customers, limiting long-term profitability. - Spending too much (right side of the chart) can lead to diminishing returns, where LTV does not justify the extra spend.   The breakeven threshold matters. - The red dashed line represents where CAC = LTV, meaning any spend above this line is unprofitable unless justified by strategic goals (e.g., market share growth). Smarter spending, not just lower spending, drives profitability. - Many brands mistakenly focus only on reducing CAC, but the real goal is to align CAC with future LTV dynamically across customer segments. What This Means for Retailers Instead of asking, “How much does it cost to acquire a customer?”, the real question is: - How much should we spend to acquire the right customers? - How long will it take to break even on acquisition costs? - Which acquisition channels and products lead to the highest-value customers? Retailers who leverage AI-driven insights to align CAC with future Customer Equity, not just at a blended level but dynamically across customer segments, can spend smarter, scale faster, and drive long-term profitability. If you want to go deeper on this topic, Professor Peter Fader has done extensive research on customer-centric growth strategies. Check out this fascinating podcast with Nick Hague on how businesses can take a more data-driven approach to optimizing CAC. https://lnkd.in/eGu5EM5g #CustomerAcquisition #EcommerceGrowth #MarketingStrategy #CustomerEquity #GrowthMarketing #CACvsLTV #RetailStrategy #Profitability #WGBTpodcast

Stars are aligned, winds are favourable; it's time to sail... Since the beginning of this year, I have been sensing a global shift, that's now clearly in motion and the good news is that, India is at the centre. Recent reports from Moody’s and S&P confirm that global supply chains are clearly tilting towards India. And with supportive government initiatives, ground realities are changing fast: 1. PLI schemes are driving back interest in manufacturing. 2.Highways, new ports & freight corridors are reducing logistics time and cost. 3. Transshipment hubs are on the rise to boost export capabilities. Besides this, availability of young skilled workforce is our biggest advantage. So, my clear message for SMEs in manufacturing or trading is, "Don’t anchor in hesitation when conditions favor a leap." Augment capabilities, tie-up with global companies and start exploring export opportunities. It's equally a huge emerging opportunity for young talent, not only for jobs but more as entrepreneurs to venture into manufacturing, logistics, supply chain management. And for Indian IT companies, it's is a wake-up call to pivot. Move from legacy service models to products, platforms and smart infrastructure to; A) Build solutions in Industry 4.0, IoT, robotics & automation. B) Become enablers of productivity, efficiency & intelligence at the shop floor. C) Use AI as a performance multiplier, decision enabler. Now is the time. For founders, for business leaders and entrepreneurs, it's time to invest in strategies, develop capabilities and build execution momentum for the future. Those who will move swiftly with clarity and courage are going to shape the next decade of prosperity. #strategy #leadership #manufacturing #IT #growth

Building financial resilience of your SMEs in facing economic uncertainty 🎯 I have seen in the past few months where Indonesia is experiencing unique economic situation. While the GDP continues to grow positively at around 5.1%, but there is also trend of decreased purchasing power especially among middle to lower income consumers that have made the business landscape become more dynamic 📉. For SME entrepreneur that focus their business on those consumer segments, they will need to adopt the right strategy in navigating such market dynamic. That means the traditional financial practices may not be enough to sustain your business and a resilient financial foundation has now become more essential. As Fractional CFO, I would suggest for SMEs to build financial resilience in navigating their business during these uncertain times.  Below are several strategies that can help build a resilient financial foundation of your business: 1️⃣ Stabilize your cash flow: Prioritize stable cash flow by continuously monitor your payment terms with clients and vendors. Keeping a close eye on cash flow is crucial in navigating economic uncertainty. 2️⃣ Build adequate cash reserves: Building a financial cushion can be the difference between navigating a tough month and facing a major setback. Aim for reserves that cover at least 3 to 6 months of your business fixed costs. It’s not easy, but small, consistent allocations can quickly add up and provide peace of mind during volatile times. 3️⃣ Effective cost management: In these challenging times, you need to focus on having effective cost controls instead of aggressive cuts. Identify essential vs. non-essential expenses and consider reinvesting saved resources into areas that have potential to drive long-term growth. 4️⃣ Implement solid financial controls: Establish robust financial controls, from regular budget reviews to forecasting under multiple scenarios. This forward-thinking approach can help your business become more agile in such uncertain times. 🤔 As SME business owner, how do you strengthen your business’s financial resilience in facing such dynamic market condition? Share your insights in the comments below. 🙏 If you're gearing up to scale your SME or early-stage business to new heights, let's connect. Together, we can explore strategies to optimize your business cash flow and strengthening your financial foundation. #ScalingUp #BusinessTransformation #Resilience #FractionalCFO

This is the deck I presented to our board to go from $1M to $10M ARR, and it worked. 18 months after our last raise, we needed a clear plan to break through the next ceiling: $10M ARR, profitably. A milestone only 0.4% of companies hit (according to VentureBeat). We built this strategy to align the team on how we’d get there. What worked well: 1. Retention over acquisition. Real growth isn’t about how many sign up. How many are sticking around and engaging? - Retention is the foundation of sustainable growth - It’s the clearest sign of product-market fit - Without it, topline metrics rise, then collapse - Pouring users into a leaky bucket only accelerates churn 2. One clear north star: $10M ARR, profitably. Every project, resource, and team goal had to drive that. 3. Multiple product bets. We uncovered new value by shipping fast and letting customer signals lead us. Some bets flopped. Others unlocked entire new segments What didn’t work as well: 1. CAC as the main marketing KPI. CAC alone isn't enough. Low CAC? We might be underinvesting High CAC? Fine, if payback is short and LTV is strong → We switched to tracking payback period 2. “Winner takes most” framing. A board member called this out and was right. It’s not zero-sum Better to build Sarwa's own lane There are many winners in any market 3. Over-focus on retail. We missed the early signals in another segment: millionaires migrating to UAE. They became our fastest-growing group in 2024 We are catching-up and are now racing to serve them better → Growth needs both focus and peripheral vision Hope it’s useful to help articulate teams' focus and growth plans.

I am thrilled to announce the launch of the Andersen Institute for Finance and Economics blog! In the first post, Khia Kurtenbach looks at the impact of #tariffs on #SMEs, possible implications for the US economy (#SMEs account for about half of US #employment), and how this could be an opportunity for regional #banks.   A staggering 97% of U.S. importers are #SMEs, accounting for one-third of total imports by value. #SMEs also have outsized exposures: 40% of their #imports are from #China. Importantly, #SMEs often lack the working capital or access to #bank #creditlines that larger businesses can tap into –a tool helpful to smooth through some of the #tariffs impacts (for example, via front running #tariffs with larger inventories or smoothing through price increases). But #tradepolicy changes could also create opportunities – notably, regional lenders and small #banks have a unique opportunity to capitalize on these disruptions and deepen their partnerships with #SMEs. As of 2023, more than two-thirds of #SMEs reported choosing a small or regional financial institution as their banking partner. Here is why they are going to rely on those relationships: -- #SME credit needs are likely to increase as tariffs change #inventory management plans in light of #supplychain disruptions. #SMEs don’t have the capital to run larger and longer #inventory cycles, and they can’t tap into the #bondmarket, so #banks are often the only available option. -- Many #SMEs will also see input costs go up and may need to use #creditlines to pay for #tariffs when due at customs. Passing on these higher input costs to downstream consumers will likely occur with a lag. -- Some #SMEs will also have a greater desire or need for #currency hedging in light of recently increased volatility in #FX markets. https://lnkd.in/esVi69xq

A quiet revolution is underway across the Middle East’s SME landscape—one not marked by headlines but by deliberate, strategic moves toward 𝗳𝘂𝗹𝗹 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝗶𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻.. Nowhere is this shift more apparent than in the rapid adoption of digital payments. In the UAE, 𝟴𝟯% 𝗼𝗳 𝗦𝗠𝗘𝘀 have made digitising payment systems a core business priority, laying the groundwork for smarter, more resilient business models that can withstand the volatility of modern markets. Digital payments are often the entry point, but they unlock far more than transaction speed. They enable SMEs to tap into real-time cash flow management, build credit profiles based on verifiable data, and access embedded financial services directly through their sales platforms. For smaller firms, this means bypassing traditional financing hurdles and entering the financial mainstream on their own terms. The Middle East’s digital transformation market is projected to grow from USD 50.26 billion in 2025 to USD 149.34 billion by 2030—an annual growth rate of 24.33%. The implication is clear: digital infrastructure is becoming the economic backbone of the region, and SMEs that embed themselves into this infrastructure early will capture outsized returns. But this isn’t just about scaling technology. It’s about SMEs gaining leverage. As governments roll out digital-first policy frameworks and financial institutions build SME-centric fintech ecosystems, small businesses are no longer on the margins—they’re being invited to play a central role in shaping the region’s economic trajectory. Access to cloud-native tools, automated financial services, AI-enhanced insights, and digital marketplaces is lowering the barriers that historically limited SME growth. Businesses that once operated locally are now selling globally. Those that lacked formal credit histories are now accessing growth capital via digital lending platforms backed by transaction data. We’ve seen global success stories underscore just how transformational this shift can be. DBS Bank in Singapore has digitised over 90% of SME loan applications, slashing turnaround times from weeks to hours through AI-powered assessments and paperless trade finance. In Russia, Tinkoff Bank has built a fully digital SME ecosystem—including banking, HR, tax, and e-commerce tools—serving over one million SME clients and cutting business operation costs by up to 60%. And in Africa, Kuda Bank has reached six million users, many of them small business owners, through mobile-first, zero-fee banking and access to working capital via micro-loans. These cases highlight what’s possible when digital infrastructure and financial services align. Yet the window to act is narrow and the digital age won’t wait. For those ready to invest in agility, intelligence, and scale, the next five years represent a rare alignment of conditions—technological accessibility, regional policy support, and market demand—all favouring SME-led innovation.

Since founding Triple Whale, I've personally met with over 5,000 ecomm brands, and seen benchmarks data from another 25,000 more. Here are the 5 truths I've seen from the TOP performers👇 1. Having a high allowable CAC is Alpha: CAC is only going up. When we started Triple Whale, the average brand’s CAC had gone up over 50%. If you're optimizing for the lowest CAC possible, you've already lost. You need to build a business that can support the highest CAC possible: -Having spillover to Amazon -Having great retention -Being in retail The biggest brands don’t win by lowering CAC they win by paying more than you can... because they built a model that makes it profitable. 2. 95% of brands invest far too little in creative: Media buying is 95% automated, ASC does the heavy lifting. Targeting is baked into your hook. “Men over 50 with knee pain, watch this.” That line is the targeting. In 2015, it was a checkbox in Ads Manager. In 2025, it’s your script and casting. Back then, it was standard to spend 10–15% of ad spend on a media buyer. Slow-growth brands cut this and viewed it as savings. High-growth brands took that (and more) and invested it into creative. I know brands dropping $100K+ a month on kids in a Discord, and they’re laughing their way to the bank. 3. Brand Marketing generally loses money: Everyone wants to be Athletic Greens. Slick site. Minimalist vibes. Celebrity podcasts. But you’re copying chapter 20, not chapter 1. AG1 started with aggressive direct response landing pages, fast-edited copy, relentless testing. Brands over-concerned with brand image move slow, test less and are less persuasive. The best brands scale with speed and sales, then clean it up later. Don't let ego and the vision you have for your brand get in the way of making profit. 4. Agencies work. Everyone wants control and you have way more control when doing something in house. But most teams aren’t good enough to justify it. The fastest-growing brands on Triple Whale rent greatness. The top brands work with 5+ agencies at once cut the under performers. 5. This space is smaller than you think: You might think you’re in charge, but the best agencies, SaaS vendors, and employees choose who they work with. And they talk. Burn a partner, ghost a vendor, late to pay invoices word spreads. Fast. This is what I've learned but I am curious... What am I missing? What have you guys learned?

This is the most important table in e-commerce—but no one ever talks about it and it's costing you MILLIONS. It's not a cap table. It's not an AOV table. It's the returning customer cohort table. It shows by month acquired, how much customers are worth on first order and each month thereafter. Why it's the most important thing in ecom: 1. True Customer Value Revealed A $50 first order may become $120 over 6 months. This changes everything - suddenly, that "expensive" acquisition cost is a bargain. Many brands have ROAS targets that are too high, they aren't accounting for 60-90D value. 2. Market Domination Justify higher CAC by looking at long-term value. If 90-day value is $200, you can afford $100 CAC while competitors cap at $50. Dominate your market. 3. Cohort Analysis Insights Discover which channels bring high-value customers. FB ads might cost more but deliver 3x lifetime value vs. Google. Optimize spend accordingly. 4. Cash Flow Management Predict payback periods accurately. If cohorts show 60-day breakeven, confidently reinvest every two months. Scale aggressively but safely. 5. Product Strategy Identify which products create loyal customers. If Product A has 70% retention vs 30% for B, prioritize A in marketing and development. 6. Forecasting Precision If cohorts consistently grow 20% monthly, project revenue 6-12 months out with confidence. Plan inventory, hiring, and expansion strategically. Master the cohort table to build a customer value engine that compounds over time. This is how category-defining brands are built. Not by having the highest ROAS.