How to Run a Small Business: 6 Tips to Manage Your Finances
The most effective way to achieve optimal business operations can simply be by educating yourself on the ins and outs of running a business. With that in mind, one of the critical areas that is important to focus on is your small business’s finances.
Running a small business requires hard work and effective multitasking. But as a business owner, I’m sure this isn’t news to you! I’m sure you also know the importance of managing your finances but sometimes it’s helpful to have a reminder and to learn some extra tips, so you can manage your finances even better.
No matter the size of your business, properly managing your finances can help ensure your company remains stable and can prevent the financial difficulties that can lead to business failure.
When it comes to managing finances, there are many things to consider:
- You need to pay yourself and your team
- You need to monitor ongoing expenses and revenue
- You also need to know when it’s okay to spend money to make money
This can be quite overwhelming if you are a new business owner. You may want to consider seeking advice from an accounting and business advisory firm to help you with this task.
So how can you maximise your earnings and in return, grow your team, expand your business, and more?
How Do I Start Managing My Business’s Finances?
If you are learning how to manage your business’s finances, you’re one step closer to reaching financial success. Fortunately, knowing the basic skills to run a business can help propel your finances and keep your company afloat.
If you are wanting to find methods to create a stable financial future for your business, it’s important to start with optimally managing your business’s finances.
1) Don’t Forget to Pay Yourself
Small business owners often wear too many hats and put all their energy into day-to-day operations. If this is you, it’s important not to overlook your role in the company, and pay yourself accordingly.
As a business owner, you are a crucial component to the success of your business and it’s important to pay yourself what you deserve.
This way, you can ensure that your business is in good financial shape and your personal finances are in check as well.
2) Put Your Money In Growth
Besides paying yourself, it’s also a good idea to invest your money in opportunities that promise growth. But how do you know if an opportunity is worth investing money in?
Here are some things that it’s okay (and can be a great idea) to spend money on as a small business owner:
- Investing in Employee Training and Upskilling
- Tools and Technology That Help Streamline Business Processes
- Investing in the Brand of Your Business
- Professional Legal, Tax and Financial Services
Ultimately, anything that saves time, money and moves your business forward is worth it.
3) Keep Your Business Credit in Check
The more your company grows, the more expenses you have to manage. It’s essential to keep your business credit score in check.
A good credit score means:
- you’re quick to pay bills and debts
- suppliers are likely to be more flexible and accommodating
- you may increase your borrowing capacity and improve your loan terms
Having poor credit can affect your approvals for different transactions. It’s important to ensure you are able to pay your debt on time to maintain a good credit rating and keep your team happy and supported.
4) Pay The Bills
When you have a mountain of unpaid bills, it can negatively affect your business growth – not to mention, cause unneeded stress!
To ensure you can pay all of your own bills, it’s also important to ensure your customers/clients pay their bills too.
Consider putting more efficient payment methods in place to ensure you can be paid quickly and in turn, stay on top of your own bills too
5) Prepare for Tax Season
Most business owners I know say that tax time comes around quicker than they would expect (and prefer…).
If you don’t prepare well, tax season can become quite complicated and can be a difficult thing for businesses to navigate. In that regard, an efficient way to mitigate any penalties and pay on time is to use an experienced tax and accounting team.
Seeking assistance from accounting firms like 123 Financial Group can support you with your taxes and bookkeeping needs, so you can stay on track with your taxes.
6) Keep an Eye on Your Expenses and ROI
If you can keep a close eye on your expenditures and return on investment (ROI), it can provide you with a good view of where you’re putting your money and what is helping your business to grow.
This can also allow you to decide whether the financial strategies you have employed are providing you with the best financial outcome.
When you focus on the ROI every time you spend, you avoid wasting money and instead, you can be in a position to make the right investments that help your small business grow.
Proper Planning and Managing Can Help Set Your Business Up For Success
There’s no doubt that financial management can aid the growth of your small business to success. With efficient financial management, you can gain a better view of your cash flow, expenditures, and debt, allowing you to plan ahead and reach your business goals.
Working with a credible accounting firm and business advice team, you can have all your finances in check, ensure no deadlines are missed, and be provided with a strong financial strategy to help support your company’s growth for the future
123 Financial Group: Business Advisers in Newcastle
As a small business owner, you’re likely wearing too many hats and putting your finances in the back seat. It’s easy as a business owner to spend more time working ‘in’ the business rather than ‘on’ it.
If that’s the case, it’s time to work with reliable financial accountants and advisers to steer your finances in the right direction and manage your financial strategies for you.
123 Financial Group has been in the industry for more than 15 years, providing lasting financial freedom and support to residents of Hunter Valley. With our help, you’ll obtain expert support in managing your finances, receive guidance in business advice, tax, accounting, and more.
Looking for credible business advice and accounting firm in Newcastle?