Owning your own small business can definitely take a toll: physically, mentally, and especially financially. There’s no right way to run a business, but there are definitely ways to make it more manageable. Odds are you are savvy, but maybe not an accountant or finance whiz, which is why you’ll need some outside help. Here are a few simple tips and resources to keep your business finances in order.
Know How to Budget
Before you start spending, it’s absolutely vital that you create a budget. How much will you be spending on inventory? Employees? Do you have enough to spend on remodels or other non-essentials? Spending without a guide is one good way to get yourself and your business into financial trouble, so make sure you set a strong, reliable budget and actually stick to it. There’s always the option to hire a professional, but you can also take a more DIY approach.
Don’t Mix Business with Personal Funds
This one might be a bit obvious, but it may be a lot more difficult than you’d think, especially in the early stages of your business. When you start up a business with your own money, where do you draw the line after that? The easiest way to keep these two separated is by making sure you use different accounts for personal and business finances. It might be tempting to dip into business funds for your own reasons, so try making it a bit harder for yourself to refrain from making this common mistake.
When money’s flowing in and out, it can be difficult to keep track of everything. And in an age where no one writes anything down anymore, you can bet there’s an app for that. If you’re too busy to sit down and create a detailed, comprehensive invoice, an app might be exactly what you need. There are plenty of invoice apps that offer professional, smart-looking invoices. After punching in all your information, all that’s left for you to do is hit send. Apps/sites are also a very good way to keep all of your invoices in one place, so you can be sure they never go unpaid.
Keep an Eye on Spending
This may seem like another very obvious tip, but do you really check the price of every single item you buy for your business? Have you ever checked your finances at the end of the month and wondered how you managed to spend so much? Once you become conscious of how much you’re spending and what exactly you’re spending it on, it becomes much easier to save money by cutting down on the amount you buy and cutting out things you don’t need. These apps are just a few resources that can help get you started.
Financial forecasting is an important part in managing business finances, and people get paid a lot of money to make them. Unfortunately, it’s something you’ll need to do for free. By knowing what financial situation you’re in, you’ll have a good idea of what financial situation you’ll be in and what exactly you’ll be capable of taking on down the road. Will you be able to hire another employee? Expand your business? Need to take out a loan? When you keep an eye out for what’s likely to happen, you’re a lot less likely to be unexpectedly hit by something that could damage your business and its future.
Save for Emergencies
With an emergency savings fund, an emergency is never really an emergency. Experts recommend having three to six months’ expenses on hand at all times. You may have heard of the 50-30-20 rule or other methods for saving, but you can even try something a little smaller. Saving can be a pain, but there are saving apps that’ll help you save money without even realizing it.