No matter what stage of your small business journey you’re at, it’s never too early to learn how to manage your finances properly. The success of your venture is going to depend on a wide range of factors, but how well you handle your money will be a big part of everything you do. If you’re not really sure where to start and you’re on a tight budget, then these tips will help you make the most of what you’ve got.
Understand banking
Whether you’re just a freelancer or are looking into starting a registered company, it’s important to know how your bank can support you. This could mean opening a business bank account to learn if it’s possible to direct deposit to someone else’s account among other concerns. Make sure you ask lots of questions or even book a consultation with an advisor at your bank. This will help you to get the support you need and allow you to fully understand all the services that are available to you. It’s particularly important to talk your financial situation through with a professional if you’re looking into taking out a loan to support your small business.
Try out accounting software
The easiest way to manage your taxes, invoices and outgoings once your business is up and running is by using accounting software. While you might think a spreadsheet will help you to get by, it’s really not enough to prevent you from making mistakes. Software will make calculations for you and help you to keep all your documents together by storing them securely online. This means that when tax time rolls around you’ll be able to prove exactly how much you’ve earned. Depending on your business’ needs, you can invest in accounting software that also covers payroll and is compatible with your eCommerce platform.
Stay on top of your cash flow
Not knowing how much money you have coming in and when is guaranteed to leave you in some hot water sooner or later. Make sure you’re tracking your income and outgoings to avoid landing yourself in debt and turning away customers. If you’re frequently playing catchup because you aren’t getting your money quickly enough, it might be time to think about asking for upfront deposits from clients or changing the way you send out and process invoices.
Don’t be afraid to invest
It might be daunting at first, but investing the money you make could help you to grow your business over time. While it’s tempting to hold on to every bit of cash you make, investing profits back into your company will allow you to improve your services over time. You don’t have to do this straight away or invest more than you can afford, but it shouldn’t be something that you steer clear of completely. Whether it’s upgrading your website, taking a course or spending more on your marketing strategy, wise investments can take your venture to new heights.
Remember, a financial advisor can help you stay on the right track if you’re not sure how to manage your money.
