4 Ways to Be Smart with Your Business’ Finances

Running a small business isn’t easy, especially as you’ll be needing to take on a lot of the work yourself. Things you might not have had to consider before such as the marketing and people management could be completely alien to you. One of the biggest challenges you might face is dealing with the money side of things. Think you’re up to the challenge? Here are four ways you can be smart with your business’ finances.

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1. Analyse your finances often

Big businesses base their finances around the fiscal year, which is great for them and their accounting teams but not always ideal for small businesses. For small businesses, it makes sense to analyse your accounts monthly. If you lack the expertise in managing your accounts, take a look at the best accounting software for small businesses that could give you a helping hand.

Being able to work out where your successes and failures are at a closer level will mean that you can avert long-term problems and make appropriate forecasts for the coming year.

2. Separate your business and personal finance

Many people who run a small business do this as a contractor for hire or as a small company that doesn’t have its own accounts. It’ll be a good move for you to open a separate account and to manage your personal finances elsewhere. If you pay yourself a salary from your business’ profits, make sure that you do so as a regular transaction.

Keep all other money in your business account to cover bills and expenses. This will help you to manage your year-end accounts better and stop any overlaps between your two areas of finance.

3. Have contingency plans

It doesn’t hurt to have some funds set aside in case your business runs into trouble. When your business is doing well, you should put some aside as a way to ensure you’re covered should anything go wrong. You might want to invest some of your profits as a way to generate further income, and you can click here for more information about the types of investments available to you.

If you foresee serious financial issues, you should make an appointment with your bank manager and see if they can recommend solutions to ease financial problems in the short-term while things resolve themselves.

4. Be frugal

If you were to need money for personal purchases, what would you do? Realistically, you would find ways to budget and make cuts that will help to free up additional money and help make those savings. You should apply the same principles to your business. If you can find ways to be frugal with your business, do it. Ways your business can be frugal include cutting out unnecessary software costs and adopting greener policies in the workplace. It may take some sacrifices, but it can be done.

Managing your business’ finances is a key part of keeping it afloat and making it a success. For further advice on making your business run like a fine-tuned machine, even when you’re not there, read this great article for advice. Getting help from others will make you a better business owner and help you learn from their mistakes.

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How to Keep Your Business Afloat When Failure Is Not an Option

Every business owner dreams of achieving success. Sadly, not all companies make it, and a large proportion of startups fail (8 out of 10 entrepreneurs according to Bloomberg) within their first 18 months. 

That’s a whopping 80% crashing and burning.

There are many reasons why businesses fold and taking steps to prevent common obstacles can make all the difference.

Here is a simple guide to help you keep your business afloat.

Value your team

Most company owners rely on a team of people to hit their targets and make the venture profitable. If you’ve got a great set of employees, don’t take them for granted or let them slip through the net.

If you’re impressed, tell them. If you’re in awe of their dedication, make sure they know that they’re valued. Offer opportunities to progress, try and make the working day enjoyable, and encourage teamwork.

Lead by example, and don’t be afraid to get to know your workforce. If your employees are happy, they’re likely to be more productive.

If your star players feel undervalued and they’re worried that they’re working for nothing in return, offers from other companies may turn their heads.

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Have a plan B

Every business should have contingency plans in place to enable them to carry on and recover if things don’t go to plan. If you’re running a distribution business, for example, it pays to be aware of services like those offered by New Era Fuels.

If you own an online shop, have you got access to the relevant tech support you need if your site crashes? Think about what could go wrong, and try and ensure that you have a solution for every eventuality.

If you can minimise the risk of downtime, this could make the difference between going under and staying afloat.

Every business encounters hurdles along the way, and if you can bounce back with minimal collateral damage, this will improve your chances of making a real go of it.

Keep an eye on the numbers

Ultimately, success in business depends on the numbers. You may enjoy your job, or you might have a great idea, but if you’re not taking any money home, you won’t be able to keep the company running.

Accounting may not be your strong point, but don’t underestimate the importance of keeping an eye on the books, and making sure you have a firm grasp on the numbers.

Think carefully before you invest more money, and make sure any risks you take are calculated.

Look at your income versus your outgoings, and if the margin isn’t big enough, think about ways you can cut costs and make savings without impacting on the quality of the service you provide.

If you employ too many members of staff on temporary contracts, for example, you could consider hiring freelancers or outsourcing when their contracts expire. This gives you access to the skills you need without tying you to annual salaries.

Conclusion

If you’re a business owner, you probably don’t even want to entertain the thought of failure. The sad reality is that many people can’t make their venture a success.

Hopefully, this guide will stand you in good stead and help you to keep your head above water.