Every small business owner knows that the key to success isn’t just about making the most sales but also about how you manage your money. This means that from day one, you need to know how to manage your business finances and keep an eye on how much money your small business is bringing in versus how much it’s spending. Not only this, but you also have to pay close attention to your own personal finances. And if you’re new in the business world, you could probably use all the help you can get. That being said, here are 5 tips that should help you get your small business finances in order ASAP.
Keep it separate
One of the most important things you need to have in mind is that personal and business finances need to be kept separate. Sure, it’s nice to have your business credit card on hand when you need to pay for your little one’s new backpack or fix that car part that seems to be dying. On top of this, you might sometimes be tempted to use your personal finances to pay off your company’s debt or buy office material. This might be helpful, but it can create a real mess when it comes to bookkeeping. More importantly, it could create a feeling that your company is doing well when in fact all you’re doing is draining money from your personal budget.
Have experts help you out
If you’re a rookie entrepreneur, chances are you don’t know much about bookkeeping. The problem is, this is an important part of running a business and bringing in professionals might be a good idea. You probably don’t have enough time to learn all about bookkeeping and you lack finances to bring in an in-house accountant. Even if you do bring in an employee who’ll keep your books for you, it still takes strong checks to make sure they’re doing it right, and these can seriously affect the office morale. Therefore, your safest bet is to turn to an accounting firm that can keep your books for you. Ideally, you’ll be able to find accounting experts with plenty of experience in your field of work.
Keep your options open
Ideally, you’ll stick to your small business until you’re ready for retirement. However, you don’t ever really know what can happen and what might change your mind about your small business. Therefore, it’s a good idea to set some money aside at the end of each month and ensure there’s no need for you to work unless you want to. Just bear in mind that the amount of money you can save each month is what determines how fast you’re going to achieve your goal. If retiring early seems unreachable to you, maybe you could save for a mini-retirement. Taking a couple of months off might just help you determine what you want to do next.
Don’t forget to get paid
You’d be surprised to hear how many new business owners forget to get paid. And since maintaining a steady cash flow is the key to success, this is definitely something you’d want to avoid doing. The problem is, it can sometimes take months for you to notices that you’re not bringing in all the money you’re supposed to. So, in order to get paid, you need to keep track of customer payments and your invoices properly. That should help you avoid collecting payments late or missing them altogether. If some of your clients keep being late with their payments, you can always turn to a collection agency.
Try to reduce your expenses
Of course, you should always want your company to make more profit. While attracting new customers and making more sales is one of the best ways to do this, it’s also recommended that you keep an eye out for some new ways to reduce your expenses. One of the best ways to do this is to try to renegotiate with your vendors. In most cases, they should be ready to offer you a better deal if you’re ready to commit to them long-term. Moreover, you can think about reducing your office material expenses. For instance, buying things like pens and paper in bulk could help you increase your company’s savings. Also, when buying new office products like desks, chairs, computers or printers, don’t throw away the old ones but try to sell them online. That won’t take you much time and effort and could save you some amount of money.
Managing your personal and business finances well is the key to success in the business world. Make sure you’re doing it wisely and you’ll be able to build a healthy business that benefits everyone, including you.