6 brilliant ways to manage your business finances
Financial management isn’t the sexiest of subjects, nor is it the easiest. But that doesn’t detract from its importance, as many people struggle with money issues daily. To help, here are 6 brilliant ways to improve your finances for almost any business.
1. Build a Budget
A strategic budget is by far the most important task any company must address in order to secure a profitable and thriving business. Calculating how much money you earn versus how much you spend is a difficult task that includes a number of variables, but proves vital to money management. Businesses must first practice the act of forecasting the future without being too optimistic and biting off more than they can chew. Most businesses that organize their budget using Excel and other programs can help battle the inconsistent months that do not yield the profits always expected by keeping business owners organized and ready. Luckily, Barefoot Investor has a great, easy to use budgeting plan they call the 60-20-20 Rule, which small businesses can use when trying to better their budgeting techniques. The rule suggests spending 60 percent of your salary on necessities (food, shelter, employees), 20 percent on upgrades (renovations, upgrades), and 20 percent on savings.
2. Save Smart
We all know that saving money is important, but for businesses that may be easier said than done. With the amount of expenses involved with managing a successful business the big question that needs to be answered is, where should the savings, if any, go? This helpful list gives 6 fundamental places your savings should go. Examples include saving to start a business, pay off a loan or even debt. And speaking of debt…
3. Avoid Debt
Debt for most is often a result of mismanaged money and for businesses a necessary evil. Being consumed by debt often makes thinking about finances even more discouraging and causes businesses to stress the importance of strict budgeting. Interest piles up and can make a company feel like it’s getting kicked while down, with no chance of getting up. Unfortunately, businesses often are forced into debt, whether through leasing a location, paying employees, or advertising. But this is a necessity for businesses and they must learn to conquer these challenges and turn debt into profit.
4. Learn to Be Open
Businesses can face a countless number of unexpected problems and issues. No matter what the business, or how much money you make, owners need to learn to adapt and manage money successfully. This requires businesses to constantly reevaluate the company’s priorities. Maybe your business doesn’t need that renovation or to take on more business than it can handle. The more business owners think like this, the more they can realize what’s really important for growth and stability. The ability to adapt and prioritize also helps you prepare for unseen expenses.
5. Get a Professional
Figuring out the best ways to manage the company’s finances takes time. Hiring a professional accountant can help take the load off. For example, an accountant can review your finances and help you decide where to spend your money. A company like John D Wood and Co, can evaluate your property and advise on maximizing its value. This type of assistance will save the company huge amounts of money in the long run.
6. Set Goals
It may seem obvious, but setting goals is a great way to encourage yourself to manage money well. Make them realistic. Set goals that are small and easily achieved, like paying off your debt, and then set long-term goals, like saving for employees bonuses and renovations. Reward yourself by setting aside some of your savings for a vacation. The feeling of achievement alone will push you that much harder in adhering to financial plans.
Now you have some ideas that can help you relieve some of your financial stress and grow your company. Remember to take time to think your financial priorities.
This was posted in Bdaily's Members' News section by Annie Davis .