Budgeting may seem like a simple task – it’s just math, right? Wrong. Budgeting is an art. Managing your funds can be difficult, so we have created this article to help you manage your funds in the best way possible! Here are some helpful tips for managing funds for small business:
1. Manage your finances right from the start
Organize your receipts, shut up the restaurant company tab, and track every bill. Then you can compare your expenses to your income and develop a budget. Prepare yourself to be criticized if you don’t follow your budget because it’s always better to be safe than sorry!
2. Plan for Long- Term
Make sure your business plan is complete. Consider all assumptions and determine how much the business may cost you. Set aside money for unexpected expenses such as car repairs or equipment replacement. Try not to borrow from the business – it can be a slippery slope and, in the long run, maybe more expensive.
3. Maintain a business bank account
Keep your personal business separate. As a small business owner, you should have a special account for your business where everything gets paid into and paid out of. It’s convenient to keep things together, but that can lead to overspending and no idea how much money you have. There’s nothing wrong with having a personal bank account, but keep it separate from the family treasury, so you don’t accidentally spend it!
4. Make sure to pay yourself
It may seem obvious, but remember to pay yourself a salary. This can be the hardest part if you’ve been a one-man operation and want to keep working because you love it. But if things are going well, you’re making money, and someone needs to pay the bills, then it needs to be your business!
5. Monitor your books and plan ahead
Produce a financial report on your business finances from month to month, and make sure that you are in the black! Always know where your money stands and ensure everything stays on track. For example, if you set aside money for taxes, keep track of how much income tax you pay every month. If you’re running low, that may mean it’s time to add more clients or advertise to increase sales.
6. Keep good credit
It’s time, to be honest with yourself. If you’ve overdrawn your account and are rolling over into your credit card, that signifies poor finances. If you do this, you will eventually lose credibility when asking for a loan. Paying bills on time can help you establish good credit and get loans at better interest rates if needed.
7. Be willing to make sacrifices
If something is not absolutely necessary, don’t buy it. It takes time to get your business off the ground and in the black, and you should be willing to make sacrifices to achieve that. As long as you keep expenses under control, avoid debt, and pay yourself regularly, you should be able to build a strong foundation for success!
8. Remember that every business is unique
It’s important to realize that every business is unique. While many factors contribute to your profit and loss statement, there are some things you can’t change. For example, if you’re a food truck operator and the weather is bad, you’ll still lose money even if you’re charging full price for your dishes.
But other factors are within your control. If you charge less for a meal because there’s not much competition in your area or because it’s late at night when people are looking for quality food and good service, they don’t notice the tiny cost difference.
Conclusion- Tips for Managing Funds for Small Business
When you’re starting a business, it can seem like there’s a lot to set up and organize. But a few basic steps will keep you on track, from managing your finances to following your budget. Over time, these practices will save your business money and help you grow in the right direction!
