Starting your own business can be a daunting endeavour. There are larger, more time-consuming steps you can take to give your business a financial face-lift. However, there are also 5 smaller, less formidable steps that you can implement on a daily basis that will help you become more financially effective as the owner of your business.
Five Practical Tips for Small Business Owners
1. Separate Personal Spending from Your Business Purchases
Setting budgets on both a personal and a business level is one of the best ways to keep your finances simple. If you ever encounter a financial problem within your business, it might seem like a logical idea to rely on personal funds until you are back on your feet. However, this can cause issues down the road when the time comes to submit your taxes.
By setting a strict budget that you can stick to in both areas of your life, you are making the lives of you accountant or bookkeeper much easier by keeping such a distinct separation in your finances. They’ll be sure to thank you, as will both bank accounts!
2. Don’t Be Afraid to Haggle
When you think of haggling with vendors or contract workers, it doesn’t have to be a scene from a movie set in an open-air market in a foreign land. Working with someone outside of your own company is a great time to talk about pricing and to read the fine print. You can compare vendors by determining what services you need and at what price, and reading the specific terms of your contract can also bring to light helpful information, like extra time allowed to pay for services rendered or discounts for first-time customers.
3. Paying Bills on Time Is Worth It
Whether it’s your credit card, student loans, mortgage payment, or car title loan, paying your bills on time is always the best route to take. This includes your bills for your business. The late fees for bills from vendors you’ve hired and utilities can mount very quickly. You may also be struggling to pay your suppliers, in which case you should consider purchase order financing in order to smooth out your cash flow. Setting reminders on your calendar, in a spreadsheet, or on your phone are great for keeping track of what is due and when. If your business is particularly new, there can be a very thin line in the sand between ending the year with a profit, or a loss. Paying on time helps ensure your first year in business will be a success.
4. Be Thrifty
You don’t necessarily need to be Ebenezer Scrooge in order to spend less money. But simple things, like mail-in rebates for new office supplies, or buying larger items for your office, like chairs, tables, and printers, second-hand can make a huge impact on your business bank account.
5. Try Taking an Accounting Course
Mathematics might not be everyone’s strong suit, that’s why bookkeepers and accountants exist. But taking a beginner’s university course in accounting is a generous step forward in understanding the cash flow of your company. You don’t need to become a professional, but a simple and straight-forward online course on money-matters sets a solid foundation in preparation for larger financial decisions within your business.
Although owning your business may leave you with less time in the day, these small steps take little time and are worth the effort to make sure your company’s finances unfold as smoothly as possible. Before you know it, your company will expand and grow, as will your profit!