Navigating Finances As a Small Business Owner
Managing finances as a small business owner is no small task. If you have little to no experience managing business finances, the feeling of being overwhelmed and increased anxiety will surely arise. If you are uncareful, making poor financial habits can do irreversible harm to your business. Luckily, there are five practical tips to remember that will help you stay in line and on track to better manage your business’s finances.
1. Keep Good Business Credit
As a business owner, you’ll want to ensure you stay in good standing with your financial institution, which will open doors to loans with lower interest rates and other perks later down the line. One easy way to keep your credit in the green is by making sure you are submitting payments on time. Lenders are more likely to approve business loans if they see you have a strong history of making payments on time.
Another way to ensure good business credit is to only apply for business credit cards as needed. This will also ensure you do not have too many outstanding lines of credit, which can negatively affect your business.
2. Monitor Your Credit Reports
Keeping an eye on your credit reports is one of the easiest ways to stay on top of your financial information as a small business owner. You should regularly check your credit to see any errors or inaccuracies in the reports. Keeping your business safe and protected from theft and fraud is imperative as a small business owner. You might be thinking, “Is it that big of a deal? What’s the worst that could happen?” The answer is simple: a great deal of harm can happen to your business if your business accounts are hacked, and thieves successfully steal valuable information or assets.
3. Look for Areas to Grow
Big name corporations did not become big name corporations overnight. Take the time to examine your income and set funds aside each month for future goals and growth opportunities. Investing in your company will lead to your organization’s development both internally and externally. The extra funds you save for growth opportunities will allow you to invest in your employees and workspace. You’ll be able to do things like putting a deposit down on the building of your dreams without paying out of pocket. Or, maybe you’re interested in sending your managers on a business trip to a leadership conference; that, too, is possible with a little planning and saving. We know your business means a lot to you; why not pour into your business so it can pour back out for what is important?
4. Create a Budget
Although this may seem like a no-brainer, many small business owners skip over this crucial planning step. Creating a budget will help you realize what is necessary and what can wait. We encourage you to track your expenses over a few months to see where you spend most of your business dollars. Ask yourself if there are ways to trim down or cut back on unnecessary spending. Budgeting and sticking to it is one of the most effective ways to ensure your business will not head into a downwards spiral of debt.
5. Get Help Before It Hurts
Not everyone is equipped to take on the financial responsibility of a small business, and that’s completely okay! It’s important to ensure you get the help you need before things get too bad and your business is forced into bankruptcy. Protecting the longevity of your business has to be at the top of your priority list as a small business owner; enlisting the help of financial experts to better strengthen the likelihood of financial success will pay off in the long run.
When You’re Ready, We Can Help
Now that you have a good idea of how to better protect your business’s finances as a small business owner allow Bumgardner Morrison to help! With over 70 years as a full-service accounting firm, we are the area’s leading financial experts. We can help you meet your fiscal goals as a small business owner while offering peace of mind that others can’t. Contact us today and let us help you keep your business on track to a better financial future!