Many people dream of becoming their own boss, but they don’t know where to start. They don’t know how to write a business plan, how to register as a business, or how to set up the right kind of accounting systems. Luckily, there are many ways that you can learn about all aspects of running your own small business; including these ten financial tips for small businesses that will help you get started on the right foot and thrive amidst the uncertainty of being an entrepreneur!
1) Keep your business expenses separate from your personal expenses
One of the most important tips is to keep business expenses separate from personal expenses. Keep your receipts in a folder or binder labeled with the date. This will help you when tax time comes around and will also help you see where your money is going. It can be really hard to keep track of all of your business expenses, but if you’re organized and diligent in this area, it will be well worth the effort.
2) Have an emergency fund
To make sure your business can continue, an emergency fund is a must. These funds are used when expenses exceed the amount of income coming in. To build up this fund, set aside a small percentage of your profits every month. Don’t put it off–the more you save now, the less you’ll have to worry later on.
3) Get a business credit card
Every small business needs a credit card to help grow and thrive. Here are some questions you should ask yourself before getting a credit card as well as some tips on how to use it.
- Do I want an unsecured or secured card?
- What is my credit score?
- Am I going to carry balances on the card?
- Will I be using the card internationally?
- What kind of rewards am I looking for?
4) Have a budget and stick to it
Don’t spend more than you make. Track your expenses and keep a budget. If you’re not sure where your money is going, track it! Set up an account with Mint or Quicken so that you can see where your hard-earned cash goes. With this knowledge, adjust your spending accordingly.
5) Invest in accounting software
One of the best investments you can make is in accounting software, like QuickBooks. It makes it easier to keep track of your finances, and ensures that you’re not spending too much time on this task. You’ll need good bookkeeping skills to use these tools though. Hire an accountant if you don’t have them!
6) Stay on top of your invoices
The most important financial tip is to make sure you’re staying on top of your invoices. If you have customers who owe you money, it’s important that you send out reminders and follow up with them if they do not respond. This will help ensure that your business stays afloat amid uncertain economic times.
7) Offer discounts for early payments
In order to help small businesses thrive, we’re now offering discounts for early payments. The more you pay up front, the more you’ll save on your monthly bill. For example, if you pay 3 months upfront, you’ll save 10% on your total monthly cost. You’ll also get an email reminder before each payment is due so that your finances stay on track and running smoothly.
8) Negotiate with suppliers
Negotiating with suppliers is a great way to reduce your costs. When you’re buying in bulk, you can get a better deal on the price. For example, if you agree to buy 100 widgets at $5 each, the supplier would give you that same discount if you buy 1,000 widgets at $4 each. Plus, it’s good for them too because they have less inventory and can sell more of their products.
9) Use cash when possible
It may seem like a no-brainer, but using cash as much as possible is a great way to avoid debt. Cash won’t cost you anything if you’re paying off the balance every month, and there are many benefits of not carrying a balance on credit cards. For one thing, it will help keep your credit score up, which can be difficult when credit card debt enters the equation.
10) Seek professional help when needed
Do not be afraid to seek professional help when you need it! Whether you are looking for a bookkeeper, an accountant or a lawyer, these people can help you stay compliant with the law and make sure your business is on the right track.
