20 Jan Small Business Boot Camp: Managing Finances
Making sure your business is financially up to snuff is really important. But unless you love working with money, ensuring you meet all your company’s financial needs can be tough. It can also be stressful knowing so much depends on it.
Here are some things to keep in mind to make sure there is proper ebb and flow when it comes to your business’ financial affairs.
(If you haven’t read “Small Business Boot Camp: Getting Started” yet, you can read it here now)
Create a Budget
Making a budget will allow you to determine what you need and where to cut the fat. However, being too rigid when creating a budget isn’t necessarily the way to go either. This is because you can never predict when extra money will be needed. Another thing to be mindful of is how your budget matches the growth of your company. To succeed, it should expand and evolve when you do. Having more clientele, staff, and larger sales indicate you have more to work with. Use this money wisely.
Budget for Capital and Operational Costs (CAPEX and OPEX)
Creating specific capital and operational budgets is pretty darn important too. Capital (CAPEX) refers to the money put toward assets, such as computers, desks, equipment, and buildings. Meanwhile, money in your operational budget (OPEX) covers more abstract expenses, such as payroll, insurance, marketing, and taxes. Both are paramount to keeping your business’ blood pumping. Although both interact with each other, creating separate funds is good for organizational purposes. You also needn’t fear that these expenses will suck the life out of you, as OPEX is 100 per cent tax deductible at the end of each tax year.
Hire an Accountant or Bookkeeper
Financial management can take time, knowledge, and energy, especially for busy business owners. So why not find someone to do it for you? Not just some guy, though. Working with a trusted, industry-familiar accountant can help your organization flourish. Whether you choose to go with a professional or a knowledgeable, trustworthy friend, remember to be aware of your company’s overall financial affairs as well. Even though you don’t necessarily have to do the dirty work, turning a blind eye can cost you.
Get Accounting Software
Whether it’s early in the game and you can’t afford to hire someone or you simply prefer to take the executive role in your company’s financial matters, you can download credible accounting software to help yourself out. Speak to a financial advisor to see which ones they recommend, as industry specific programs are available.
Make your Business Profitable
This falls into the “easier said than done” category, but nevertheless, it’s half of what business is all about! Making a profit depends on so much: how your industry’s doing, location, advertising, and how you and your staff interact with clients, to name a few. Although each is specific to the company in question, there are some general tips to help bring in that extra buck:
- Present powerful networking and marketing campaigns (online presence through the use of boosted social media posts and Google AdWords helps)
- Care about the service provided to every client; they are people, not just numbers
- Part ways with under-performing staff and suppliers
- Differentiate yourself from competitors
- Share your enthusiasm with your growing team or, if alone, stay true to your goals
- Establish weekly, monthly, and yearly sales goals
- Be efficient with your resources to save a dollar here and there
- Create a profitable and competitive pricing strategy
Managing the financial side of your company can be nasty business. However, it shouldn’t scare you from making your goals a reality. Once you’ve got a handle on your financial strategy, you’ll be able to step back a bit and watch your business grow.