2018 should be an exciting year for small businesses, with lower taxes and a bubbling economy. This is no time to take your eye off the ball – you must continue to pay attention to your money habits if you want your business to do its best. Here are seven tips to help strengthen your business financials:
Set your financial goals:
You should have short-term objectives and long-term goals that will keep you motivated every day. Your goals should be timely, realistic, measurable, attainable and specific. That means you should have a plan, preferably written-out, on how you’ll achieve your goals. Prioritize these plans and then track your progress against them, using a spreadsheet or word document.
Set annual and monthly budgets:
Include assets, liabilities, income, expenses and equity. Use the IOU Financial Business Budget Smart Sheet as your starting point. Pick out areas where you want to save money, and periods of seasonal challenges that might require an infusion of working capital. We at IOU Financial can help arrange quick financing when you need it, with easy payback terms, so keep us in mind when you lay out your monthly budgets. Track your actuals against your projections and try to keep it real.
Know your cash flows:
You might need to send money out, in the form of payments to employees, contractors, suppliers, taxes, etc., before the money comes in from customers. That’s why you need a daily rundown of cash flows and have sufficient reserves when revenues are late or debts go bad. That’s another reason to establish a relationship with IOU Financial. Lack of liquidity kills businesses, so stay on top of your cash flows and recognize potential early.
Spend to grow:
Managing your money doesn’t mean you have to be a tightwad. You should spend some of your profits to grow and strengthen your company. Send key employees for training, improve your equipment and facilities, hire marketing professionals and attend business events. The up-front costs will more than repay themselves with new opportunities.
Need vs want:
Owners like to dream about all the things they want to do to make the business bigger and better. Never give up on your dreams, but always address your needs first. You might have to sacrifice the ideal for now in order to attain it later. This will reduce your risk of unplanned spending for things you don’t really need now, freeing up capital for later use.
Use debt wisely:
Debt is a tool, to be used wisely when needed and to be paid off when feasible. Look upon the interest you pay as another cost of doing business, one that allows you to meet your obligations and keep the doors open. When you take out a business loan, come to a lender like IOU Financial that will get you the money quickly without a lot of paperwork. We offer a unique daily repayment method so that you never are faced with a mountainous monthly payment, and you can refinance with us after you repay 40 percent. Always insist on affordable rates, no upfront fees and no prepayment penalties – that’s how we operate and so should you.
Protect your income:
Consider disability insurance that will keep the money coming in if something untoward happens to you. Business owners typically don’t get paid sick leave or worker’s comp, so they need a way to protect against the unforeseen. Disability insurance can help you overcome a temporary disability that would otherwise torpedo your business.
Remember, IOU Financial is here to help you when you need money fast. Add us to your speed-dial list for 2018 (1-866-217-8564) and worry a little less about the future.