If you are a small business owner, you probably know that the key to your success is not just driven by the number of customer transactions, but also the way you manage your money.
That’s why it’s important to pay close attention to how much money your company is spending versus how much it’s bringing in.
To help you with this, here are four money management tips.
If you have a business plan, you should also have a budget. A budget is guideline that helps you fix any holes in your cash management system.
Track expenditures and revenues, allocate funds to necessary spending accounts, and most importantly, watch your savings. Without a budget, you are driving blindfolded.
That’s why it is critical that you sit down and hammer out a plan to keep your company from going too far in the red.
Save, Save, Save!
Once you have a budget in place, one critical area of importance you need to focus on is saving money. There are tons of ways your business can save money by reducing unnecessary expenses.
It’s not just about stashing away what you earn from your business. It’s about being smart with your money. Check online classifieds like Craigslist for pre-owned office furniture. The money your save from buying used instead of new can be passed onto more important areas of your business.
Just as important as finding and buying pre-owned office furniture, there are ways to save by buying a used car for your business rather than relying on a new one. Used cars have a variety of advantages for business. Also, have your energy company audit your office for energy efficiency to help cut down your utility expenses.
Utilize your city government’s resources for economic development. They can help you take advantage of local tax credits as well as provide you with free resources to help you build a strategy for economic success. Take advantage of your local retailer’s cash rebate and rewards programs in order to get free or discounted office supplies.
Remember, you need to be smart with your money. Having a reserve fund or cash in hand to handle unforeseen business costs is the smart way to operate. Saving money smartly will help you do just that.
Hire a CFO
Hiring a Chief Financial Officer is one of two ways you can manage your money. CFO might be a fancy title, but if you can’t afford one, hire an accountant or an experience professional who can help you manage your finances.
They can take on the tedious task of tracking your business’ finances and alert you of any areas where your cash flow needs special attention. Hiring an accountant in-house or contracting with a local provider is a smart way to help your business stay financially healthy.
Create Strategies to Boost Cash Flow
Managing your money is more than just maintaining it. You also need strategies to help you boost cash flow and guard against times when business is slow.
Just like saving money, there are multiple ways in which you can increase the amount of cash flow. For example, you can provide discount incentives to customers or develop a rewards program to encourage customer customers to pay early. You can also add additional services in order to broaden your market appeal to customers within your industry.
You can even secure a line of credit for times when business is slow. The point here is that there are multiple ways to boost your cash flow in order to manage your business’s finances and achieve success.
Business might be about creating great products and services. But if you can’t pay your bills, you could be out of business. Manage your money wisely, and build a healthy business that benefits your customers, employees, and more importantly ‘You’.