In today’s shaky economy, your business finances can always stand to be improved upon. Building a stable financial foundation is imperative. Learn how to propel your business finances to all-new, more productive heights.
What is Holding Your Finances Back?
It’s time to give your business a good examination. Identify all the factors in your finances including accounts payable and receivable and payroll too. Analyze each area and go over it with a fine-tooth comb. Identify problems and concerns and be ready to address them. If you need professional help in doing so, do it. It’s money invested in your own investment.
The Outlook for Business Finance
In the first quarter of 2022, corporate profits in the US fell 4.9 percent down to $2.40 trillion, according to Prevedere, a financial planning and evaluation site. Prior to the drop, there was a 0.2 percent gain.
Small companies make up 90% of the world’s business and if the “big guys” are taking loses, as a small business owner, you might be in line for trouble too. It’s always a wise idea to get your finances in the best order you can to avoid going under or taking a hit at all.
It’s a proven fact that those who prioritize their business finances are more likely to succeed.
How You Can Tighten and Improve Your Financial Course
If you are open to improving your finances, some factors to consider include:
Make a Plan
“Without a plan the people parish.” There’s a lot of truth to that Proverb. That means you’ll need to analyze and assess your finances as they are and then make a budget and stick to it. Go back to the past 12 months and go forward for the next 12 months when doing so. Don’t forget things like insurance and any savings and investments you have for your business.
Keep it Separate
Make sure you never mix your business finances with your personal finances. That means keeping a different bank account for your business and a separate credit card too. By separating the two, you’ll be less likely to lose track of your business expenses. It’s too easy to make a house or car payment from your business account and forget all about it. When you commit to not mixing the two, you’ll find the figures match up much easier.
Business Credit Card
Be sure to utilize rewards your business credit card earns. From flight miles to discounts all around town, you’ll rack up points if you choose a card with good ones. A business credit card will also help you keep your business and personal finances separate.
Don’t forget to pay yourself. That’s not to say you should go nuts spending money but you do have to live so it’s important to give yourself a check. Starting with 10% of your earnings is a good rule of thumb. You can increase your pay as your earnings and profit increase.
When you must travel for business, do your best to keep expenses down. You can claim much of your travel on your taxes but that doesn’t make it free, it just means you will be taking it off the gross taxable income. There is a big difference. Travel wisely and you’ll do well for yourself.
Especially in the first years of your business, you’ll need to be frugal. Cut corners where you can and make your money stretch as far as it can. There will be more fruitful years on down the line where you can reap the rewards of being on a strict budget early on.
Control Your Marketing
Sometimes it takes money to make money. Marketing your business is a requirement of being in business. You’ll want to make sound decisions regarding how much you put into marketing but you don’t want to skimp too much or you’ll pay the price. Branding and social media marketing are two areas you’ll want to pay close attention to. Having a marketing team is ideal if you can swing it because it will pay off in the end.
Do the Math
You don’t have to buy the property you do business out of. It is wise to buy but only in the right situations. Sometimes it is best to lease. Run the figures and do what is the best thing for your situation now. You can always change the game plan later on.
Taxes. You’ll want to make sure you are maximizing your tax credits. If you aren’t a whiz at taxes, you should hire someone who is to do your filing. There are usually many things business owners look over and aren’t aware of that can save hundreds of dollars.
Down the Debt. In your planning, do your best to pay down or pay off your debt. It may strap you initially, but it will be well worth it in the end. Once you
Compare. By checking out different available options and analyzing the data, you can make more sound choices in your purchases. Medical clinics and hospitals often buy from sources such as ameequipment.ca because they have scouted the market out and realize the savings they are enjoying while others don’t take the time or make the effort to save money.
Tracking. Real-time tracking is a sure way to get a hold on your business finances. Seeing what is being done in the present is far more beneficial than digging into the past although there is value in learning from past mistakes and miscalculations. Keeping tabs on every area and every aspect of the business is imperative because typically, the hole in your funnel is in the spot you least expect it to be in.
Moving Forward. The more willing you are to implement new technologies, the more your business finances will tighten up. Being reluctant to change drove many businesses out of commission when things converted to online and more recently shut down businesses who were resistant to going to mobile phone versions. If you aren’t moving forward, rest assured you’re going backward.
Summing it All Up
As a business owner, it is up to you to oversee the finances of your company. Even if you outsource the work, keep a good eye on the health of your finances and you’ll be much more likely to succeed.