Chances are you set up a business to get involved in something that you love- but the driving force will of course be money. Business is all about earning cash and making a profit, and so knowing how to manage your finances is such an important thing to get right. Here are some things to bear in mind regarding money in your small business.
1.Borrow Money Properly
Borrowing money properly is an important part of business. You might need a loan to get your company off the ground, or to expand. However along with the repayments to consider there are also interest rates to factor in, and if things don’t sell or take off as quickly as you anticipated it could result in a slippery slope of debt. If you use a company like www.swiftfinancial.com, there are options to tailor your own business loan. This way you get full control over everything, and borrow the right amount for you.
When borrowing, always be sure to factor all costs into your budget to ensure that you can cover everything. On a personal level you will also need to make sure you’re not running into any debt since this can put the business in danger since it will be considered as one of your assets by creditors.
2. Stick To a Budget
Speaking of budgeting, this is one thing to take seriously when it comes to your businesses finances. There are plenty of tools, templates and software online which can help you to manage this and make light work of the task. You will need to make sure that the right amount is being spent on stock, materials, insurances, premises, employees and so much more. A business should run like a finely tuned machine, and money is needed to keep each of these ‘parts’ in working order.
3. Keep Good Records
As well as managing your money correctly, you also need to make sure you’re keeping good records. Any inconsistencies in things like tax could lead to huge penalties and fines- even a prison sentence. You could use accounting software to keep accurate records, and then have a professional accountant look over everything at the end of the year. This will save you time since precise and easy to understand records means the accountant will need to spend less time on it.
4. Prepare For Unplanned Expenses
Having an emergency ‘buffer’ fund is so important in business. You never know, anything could crop up which could jeopardize your business, and even lead to it ending in total failure without the right funds to fall back on. It could be a burglary, a fire or flood to your office or some other unexpected expense. Be smart and have money put aside that you can dip into should you ever need it.
How do you manage money in your small business? Have you ever run into any financial trouble?