Many small business owners are individuals who had a great idea and executed on it, but may have a little bit less experience when it comes to the financial side of a business. Obviously, not all business owners have accounting or finance backgrounds, but they still have to learn enough to handle their small business finances. Here are a few tips to help you keep your small business finances on track.
Learn Basic Accounting
Even if you are going to hire a bookkeeper or accountant to handle your books, it is a good idea to have a basic understanding of the process. This will help you to keep good records and monitor everything in between visits from your accounting professional. In addition, the better idea you have of where every bit of your money is going, the more likely you are to be able to turn a profit and maintain it.
Monitor Your Marketing Return
It is not enough to simply have a marketing and advertising budget and stick to it. You also need to make sure that you are not just flushing money away, by keeping track of how much of a return you see on your marketing and advertising expenditure. This spending should add to your small business finances, not take away from them. Find ways to confirm that your increased spending in marketing is leading to bigger profits, or ditch the spending.
Always Have Ideas on Access to Capital
You never know when your small business finances may be impacted by an unexpected expenditure due to repair of equipment or a decline in profits during a tough economy. As a result, it is a good idea to always know where you might be able to find some capital in order to keep things afloat if anything goes wrong. It’s good to have a plan so that you are never caught off guard.
Streamline the Overall Process
Those are some specific tips, but you’ll also want to streamline the financial process in a more general sense. Take the time to sit down and talk to whoever is managing your books and ask them how you might be able to simplify things or make their life easier. This can end up saving you money and helping your business to run more efficiently, so it’s worth giving it a shot. Combined with the above tips, it should all help your small business finances to stay positive.
Remember, running a business successfully does not need to be complicated. Keep it simple!
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Manny Skevofilax is a consultant and speaker that helps his clients successfully navigate the challenges of growing their businesses profitably. Since 2003, Manny helps businesses enhance their results by using his experience in strategic planning, financial statement analysis, operations, organizational development, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at firstname.lastname@example.org.