Small Businesses Money Management Tips
There are many challenges when starting and managing a small business, but one concern usually tops the list for most: money. Knowing how to efficiently utilize resources takes time – and so does making sure your finances are in order, especially if you’re just getting started.
But there are several simple things small business owners can do on a day-to-day basis to help ensure financial security for the future.
Keep personal and business expenses separate
This can get tricky at times if you’re running a solo, or very small company. Try to resist any urges to secure business finances with your personal funds, even if you find yourself in a bind. Set a business budget, as well as a personal budget, and stick to them. Always use separate credit cards and accounts so personal and business funds don’t get confused. And if all is done correctly, tax season should be a breeze.
Use your negotiating powers
Make deals with vendors before signing any and all contracts. This may call for some extra work on your end. But with a little research, you can find the best bargains when you make purchases from vendors or deal with suppliers. Read the fine print and be conscious of payment penalties and grace periods. Remember, there’s nothing wrong with asking for a discount, especially if you’re a loyal customer. Local businesses like supporting other local businesses. It’s your community, so be sure to use your connections and return the favor when you can.
Don’t use credit cards to pay bills
Unless you’re able to pay your credit card off (in full!) at the end of every month, use cash to pay all bills. Using credit cards to pay bills is a slippery slope, leaving you drowning if you’re not careful. In addition to paying in cash, you’ll want to stay on top of all of your due dates. Set up monthly reminders to ensure no bills slip through the cracks because those late fees can cost you a lot in the end.
Safeguard your cash – and trust no one
Running a small business usually means you’re operating with limited resources – and it’s important to protect those resources at all costs. Bank statements should be sent to you personally, not to the business. Even if you have a trusted bookkeeper, it’s important for you to see what’s going out and coming in with your own eyes, each and every month.
And finally… It’s your money, go after it
Enforce a credit and collection program – and never be afraid to ask for your money.
Be proactive, stay hands-on. You’ll be much more prepared to make smart money management decisions if you’re well aware of the ins and outs of your business’ finances and cash flow.