Although you might specialize in marketing or creating the perfect products for your target audience, not every business owner is going to be adept at the financial side of your business. This is especially the case if you have not taken a business-related degree, or are setting up your hobby as a business. In order to help your business to stay afloat, here is a guide to help you to avoid stumbling at the first hurdle.
Can you get help with your small business finances?
One of the best ways to get help with your small business finances is to use accounting and financial software that can automate your payments and organize these digitally. Rather than having to manually analyze your income or understand your payroll, these financial applications can do all of the calculations for you. If you are inexperienced in the complexities of small business finances, you should consider investing in payroll tool like Zenefits, for instance, as these can enable you to keep your employees and contractors happy while enabling you to easily balance your own accounts.
You should also consider hiring an accountant or financial advisor who can manage your finances for you. They will not only be able to give you advice on the current state of your finances and actions that you can take to improve them, but they can also organize your books and ensure that you are prepared for the end of the tax year.
How can you manage your finances correctly?
You can manage your small business finances well by establishing a budget that keeps your fixed expenditure and your expected revenue in mind. This will help you to understand your financial position and prepare for large expenses in the future. Additionally, this can prevent your business from falling into debt by ensuring that your expenditure can remain within the bounds of your business’s wealth. This should be included as part of your business plan.
You should also ensure that you separate your business and personal finances so that you are able to maintain enough funding to support and reinvest in your business. You can do this by opening up a separate business bank account for your company funds, paying yourself a wage rather than dipping into the revenue for your business, separating your receipts, and getting a business credit card for your expenses.
Tracking and analyzing your financial situation at all times is also vital. This will allow you to isolate any problems with your cash flow in advance, as well as ensure that all of your books are balancing and that all of your incoming invoices have been correctly paid.
What should you do if you get into financial problems?
If your business is in financial trouble, the first step that you should take is to cut your expenditure. This can be as simple as finding new energy suppliers, cutting down on your waste, reducing the expense of your marketing campaign, or finding different office premises.
You should also consider finding funding for your business. Not only do you have the option of applying for a short-term business loan while you get back onto your feet, but you can also look for angel investors and awards that can help your business to remain financially afloat in the future.