Many entrepreneurs are creative, big-picture thinkers. Though this may create the ideal recipe for bringing new ideas to life through innovative products and services, not every business owner is financially-minded. Regardless of whether or not entrepreneurs like to spend time creating budgets and analyzing spreadsheets, finances are an important part of business, and how a company manages their finances can ultimately make or break the business.
With this in mind, we have compiled a list of financial tips to help entrepreneurs and business owners get on the right track to effective financial management that will set the stage for business success:
- Don’t put off your book-keeping.
One mistake that a lot of new entrepreneurs make is putting off their bookkeeping. This may seem understandable as many business owners are not accountants and may find accounting programs and software frustrating, especially if they only need to do simple tasks like create invoices and track expenses. However, your accounting will not just go away because you do not want to deal with it, and putting off your bookkeeping can become costly in the end.
Fortunately, there are ways to make small business bookkeeping simple. LessAccounting founder, Allan Branch suggests breaking accounting down into small and manageable categories. For example, you may create categories for expenses, employee salary, and invoices in order to make the process less daunting. By doing this, you are much less likely to put off your bookkeeping needs.
- Focus on your core strengths, and get help when you need it.
This tip may seem counterintuitive, but in the long run it is far more profitable to focus on your core strengths rather than trying to do everything yourself. Many new business owners often try to take on too many responsibilities in an effort to save money, but this can end up costing them more in the end. For instance, let’s say that you are creating all of the marketing and advertising for your brand by yourself, even though you have very little knowledge of marketing and even less time to spare. Not only does this result in less than stellar marketing materials, but it takes you away from what you do best and what your business needs to thrive.
That is why it is important to determine from the very beginning what you can or should handle yourself and what you need help with. By accounting for this in your initial launch or operations budget, you will have a more accurate idea of how much funding you need to start your business. If you don’t have the funds to hire staff in-house to help with things like marketing, human resources, IT, and accounting, you can often save money by outsourcing these tasks to companies that work to provide these services for small businesses.
- Take advantage of the convenience of a business line of credit.
At one point or another, most business owners need to take out a loan or find funding to help manage day-to-day business expenses or expand their businesses. A business line of credit provides owners with ongoing access to business funds that they can use any time they need them. Whether you are planning an upcoming expansion or find that you need to replace broken equipment in a hurry, a business line of credit offers the funding necessary to keep your business running smoothly.
A business line of credit is also beneficial for retailers and other businesses with seasonal demand. This access to ongoing funds allows you to replenish inventory and pay business expenses such as employee salaries and vendor payments during slower periods. The best part about a line of credit is that you have quick access to the funds you need whenever you may need them without having to worry about having the funds on hand.
- Make use of free online resources for business finance.
A final tip is to make use of the free resources available to you online. The best way to get better at managing your business finances is to learn more about effective ways to do so. There are a variety of websites, blogs, podcasts, and other resources that offer business advice and financial tips that can help you better manage your business finances and grow your company.
Here are just a few of the resources available to business owners that can help offer financial advice and tips for managing business funds:
- NFIB Small Business Finance Blog – The National Federation of Independent Businesses has a variety or blog posts on business finance topics such as crowdfunding, alternative funding options, and more about startup capital.
- SCORE Small Business Success Podcast – The SCORE Small Business Success Podcast covers a broad range of business topics from hiring staff to marketing your business, but entrepreneurs can also learn a lot about finance topics such as alternative funding options, tax strategies, and much more.
- The Wealth Building Hour Podcast – This podcast features well-known financial experts who discuss a range of business finance topic from planning for and managing risk to venture funding.
- Finance and Accounting YouTube Channel – This YouTube channel offers a range of videos on important business finance topics such as crowdfunding, tax strategies, and much more.
Though creativity and determination are important traits for business owners, a company can easily fall apart if its finances are not managed properly. Entrepreneurs who have the ideas and the drive to start their own business, but not necessarily the financial experience can use these tips to help set their company up for success.