Check out some straight-forward and simple tasks that can help you in keeping the grip on your company’s financial situation.
In the United States, there are nearly 30 million small businesses, according to the U.S. Small Business Administration. Companies with fewer than 500 employees are a significant part of all the market in the country, and they create 60% of the job positions. However, a U.S. Bank study showed that more than 80% of the companies that fail do so because of cash flow issues. Keeping the finances up to date is an overwhelming task, especially for business owners, who have typically too many plates spinning.
There are a few simple tips that you can put in practice today to help you to keep you on top of your company finances:
Keep a Clear Borderline Between Personal and Business Finances
Have a dedicated business bank account is the first thing that small business owners can do to keep their companies financial situation on track. It will save you from a headache during the tax season. If you have just one bank account for personal and business use, you will go through the nightmare of trying to sort which charges were for own or for your business. Also, having different bank accounts will help you to keep your finances under control, including your monthly expenses link rent, loans and utilities.
Define a budget and Review Your Numbers Regularly
Imagine how much time you dedicate to make your money and the amount of time that you put into organizing it. The second financial tip for small businesses owners is to take some time to re-examine your income and expenditure. It will assist you to have more confidence in future decisions. In the long term, structured planning will make all the difference in the growth of your company.
Budgeting is not about to complicate your life. You can make it easy for yourself. If you have monthly bills, create a schedule for an automated payment or direct debit. With it, you avoid extra fees and keep your name as an excellent payer to not be penalized if you need to get a loan, for example. To keep payments under control, there is a range of software that can help you with that too.
“Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” —Frank A. Clark
Stabilised some financials goals and priorities
Where does your business look like in 1, 3 or 5 years from now? With those goals in mind, you would be able to plan and set up financial goals. If you want to buy new equipment or add a new service or product to expand your business, you will need to have money to invest or get a loan. More than 60% of American entrepreneurs start their businesses at home, a house or office renovation also needs to be planed carefully.
Reinvesting in the company is not just about hiring people or buying new equipment. If you consider that you need to keep your business on top of technology, building an app or developing an existing mobile app for your business. As the number of smartphone users will grow to 2.1 billion across the globe by next year, your company needs to be updated to the customers need.
For any investment, now is the time to plan how much would you need to calculate how much to put on that and in how long you would have the investment back.