Being a small business owner has lots of very difficult challenges that need to be met and overcome. Managing your finances is one of those many challenges that will no doubt be a substantial consideration for those hoping to maximize profits in a small business. Fortunately, there are many ways that you can keep your finances in order.
Keep Track of Your Finances
Organization is the key to keeping your financial situation in order and up to date. You will need to keep up with all of your receipts and invoicing to ensure that when taxes come or even a budget check, that you have an accurate number of how much you have spent and have left. You will also need to keep track of all of your loans and debts you may acquire.
Have Separate Accounts for Your Personal and Business Expenses
You do not want to mix your business and personal expenses. It is best for you to have separate accounts for each. Unless absolutely necessary, do not take money out of your personal accounts in order to “help pay” extra bills. The company should not spend more than it has made without the ability to pay it back through payments.
Be Frugal
Considering the advice given so far, we need to look at the other side of things. There will be things that you will have to spend a lot of money on for your business. Your business will not generate a profit unless you invest some money in it. However, there are several ways that you can do this wisely.
One example you consider is buying used equipment to start off. You can also eliminate unnecessary spending by looking over costs that are not absolutely necessary for the immediate growth of the business.
Additionally, if you feel like you are spending too much money on your office, then you should consider moving to another space or working out of home until you have enough money to fund the kind of office you are looking for.
Hire a Certified Public Accountant
A Certified Public Accountant can help you manage your business finances. They will also be able to tell you about the tax laws and how they apply to your business, which is extremely important, considering just how much rules can change from businesses from state to state in the US.
Furthermore, a CPA can also assist as a tax advisor who can give you professional advice to help you save money in the long term. You may be eligible for a number of tax advantages as a small business owner and a CPA can give you the best advice on how to make the most of that opportunity.
Make Sure That You are Insured
It is estimated that 1 in 12 small businesses will have to close their doors due to the injury or illness of their employees. That is why it is important to have disability insurance. You will also need to have personal life insurance. If you are unsure about the type of insurance that you need, you should speak with an insurance agent. On the off chance something goes wrong, it is good to make sure your financial future does not hang in the balance.
Surround Yourself with Experts
One of the reasons that many business owners fail is because they do not have the right people in their corner. You will need to have a network of people who can support you and give you the valuable advice needed to run and keep up a business.
In addition to an accountant, you will also need a tax advisor, lawyer, and just find ways to mingle with other business owners or investors at conferences that allow you to meet people who have been through your situation and have better insight than you might.
Pay Yourself First
When many business owners get paid, they invest all of their money into their business. They take care of their business expenses and buy new things to help the business grow without first making sure their own personal dues are met. It is important to make sure that when the money comes in, you pay yourself first. You should be saving 10 to 20 percent of your income and make sure you are getting what you need to make a living while running the business.
In summary, it can be very difficult running a successful business. Staying ahead of finances can be one of the most important parts of building a company that will succeed and grow continually. Tools such as Quicken can help you personally keep your finances in order so you always know how much you have in the bank and how much you can spend. This is not just important in the business world, but your personal life as well.
Guest Post: About the Author
Hi, I’m Austin Winder, a Public Relations Specialist and contributing author for Uppercut Box. I live in Memphis, TN and graduated with a business and marketing degree from the University of Memphis.