It is not uncommon that people struggle with the financial side of managing their small business. While there are many tasks to get through in an average day managing your finances might be something you avoid doing. However, it’s something you can’t ignore.
Business owners with more start up cash might have the resources to employ someone to take care of the finances. However, if your budget is tighter you will need to be more involved and hands-on.
Being up to speed with your financial position is pivotal to making daily decisions. Keeping an overall financial picture of your business will help you to make important calls that affect the future of your business. Even fairly basic financial knowledge can be valuable. However, information technology has made financial management easier than ever. For example, cloud-based bookkeeping has allowed business owners with little or no financial training to keep on track of their records.
One of the key tasks for new businesses is to work out the cost of your start-up. As well as the initial launch, you will need to be able to financially make it through the first 12 months of business.
The cost must be kept to a minimum, this requires resourcefulness and willingness to make sacrifices.
As well as working out your start-up and operating costs you will need to be able to predict sales revenue. In order to do so, you’ll also need to know how to set prices.
Once you know how much money you require to initiate your business you can then decide whether you can do it with your own cash or whether you need to secure start-up funding.
Making a healthy cash flow is critical to the success of your business. In conjunction with this you will also need to ensure you get paid on time. This will demand all of your credit-control powers.
You can ensure this by setting cash flow targets, agree clear payment terms, invoice quickly, make payments easier for customers, offer clients fixed rate payment packages, use technology to manage cash flow, focus on cash flow rather than profit and keeping the bank informed.