When running a successful small business, it is important for us to get a lot of key elements right from the get-go. When it comes to balancing your finances and everything else to make a profit for your business it can feel daunting, and that’s why we have put together a list of tips and tricks for you today to make your financing so much easier.
Manage your accounting
The most important thing you have to do to be successful when it comes to business finance is to manage your accounting and ensure that you never stray below a certain margin for a given month. During the early days of running your business you can even consider taking a look at your bank statement each month so that you can ensure you are not spending money where you shouldn’t. This is a helpful tip and something which will do you a whole lot or favours because if you always know where you stand, you don’t have to worry about overspending.
Review your costs
Take a look at all of the costs you have for running your business. This will include the rent for your home or office, your energy bills, marketing costs, procurement costs, equipment and much more. Is there a way that you can cut down on the price of any of these things? There are a lot of elements where you could save and scrimp such as with your marketing where you can use free tools, and your supplies for manufacturing which you can buy in bulk. Find those little margins where you can save a small sum here and there and it will start to accumulate eventually into something you can grow with.
Make future projections
It is important to have one eye on the present and one on the future when it comes to business and this is why you should always look to save. Saving for the future of your business could mean a new office or a line of products or something else entirely. But having an eye on the prize will allow you to know how to get there. Think for example about something like a monthly projection for where you are headed based on your current profits. This will allow you to steer your goals towards this and even exceed the goals you have set for yourself.
Install an app
Having an app on your phone which helps you track your spending is a great idea. For example apps like Yolt can be used for your business or personal accounts and it will help you to track where you are spending the most money each month and give you some suggestions for how you can make improvements. An app is great because you can carry it around with your wherever you go so you always have that piece of technology at your disposal.
Remember to invoice
Always, always invoice. If you are in the early stages of a business you can try a service like Capalona for invoice finance and they will help you set up an invoicing system and keep it running whenever you get a sale. The reason an invoice is so crucial is that you will be able to gain a tracking number for each individual order and you can organise all of this to keep an eye on your profits and your payments.
Set payment deadlines
It is important as a business that if you ever have to pay anything to anyone or if someone has to pay something to you, that you set a deadline. Deadlines will have a big impact on you and your ability to run a successful business because it will ensure that no one else is able to delay your payments and leave you high and dry. Make sure that you have strict deadlines, after which interest will be added to payment and this will ensure that people don’t try to get away with not paying for their item or service.
Follow up with sent invoices
If you send an invoice and don’t hear back within a few days, it is important for you to follow up on the invoice and ensure that you can make the relevant adjustments and ensure that they received it. If someone isn’t responding to an invoice you will need to take action and make sure that you get paid.
Create a spreadsheet
It is always a good idea with your finances for a business to make a spreadsheet to keep everything organised and in check. This can be for small orders such as a company lunch or for big orders such as supplies or a freight delivery. Make sure that every time you make a purchase you add it to the spreadsheet and it will automatically show you how much you are spending and will allow you to see how much money you have left in a given month. Make sure to really consider this and be careful when creating it so that you get all of the information you need out of it.
Have a separate business account
When you start a business from home you might have all of your profits and coatings coming out of your own current account, and this is ok when you are working on a small scale business. However when you start to grow and expand into something new, it is important for you to open an account purely for the business so that your personal costs don’t get muddled when you are trying to decide on your budgets. Make sure that you take the time to separate everything so that you have an account for your business and the data will all be clear to you.
Pay yourself first
It is important as a business owner to remember that as much as you want to put into your empire, you need a solid wage too. Be sure that every month you pay yourself before you do anything else because at the end of the day, the whole reason for starting a business is to make an income for you and your loved ones. Once you have paid yourself you can start looking into ways to grow your business with the remaining budget.
Never pay for anything that you can get for free. There is no reason to pay for things such as expensive software and such when you can easily get this information for free. Make sure that you always look for a non paid option or a cheaper option for everything because the more you can save on this, the more you can pay yourself and use to develop new items.
Reduce travel costs
If you have to travel a lot for your business it is important for you to really consider the cost of your vehicle and your needs. If you have a drive from place to place to meet with clients and such, have a think about getting an eco friendly car which will use less fuel and cause you to not have to fill up as often.
Take a break
As much as it can be great to be on the ball all of the time, it is also important for you to never worry too much about your work that you can’t relax. If you constantly work and never let yourself take a step back, you are much more likely to make bad mistakes and this can be a real issue for you. Make sure that you think deeply about what you want to do with your business and ensure that you rest when you need to.
Prioritise big issues
Make sure that you always use your brain to prioritise the most important issues in the business. There are a lot of different things which will crop up in your time owning a business and you need to make sure to always know which issue to deal with first. For example if you need to pay a debt which has a high interest rate, or another debt which is larger with no interest rate; you should always pay the one with interest first because this is time sensitive.
Understand your limits
As a business owner, you will have to put on a lot of different hats during your time working to build your empire. Being able to work effectively with a lot of different departments of a business is crucial and you will need to balance this in your day to day work. However you also need to know where your limits are and how they will affect you and your business. When it comes to financing there will be a lot of elements you don’t know and you have to leave this up to a professional if you want your business to be successful. Never take on more than you can chew because this is where mistakes will happen and this can be dangerous for your business.