Your business’s financial security is absolutely crucial to its success. You can have the greatest products in the world and amazing customers, but if you don’t have a financial structure or plan in place, you could end up closing up shop sooner than you’d like. Here’s how to get to grips with your business finances and keep things on track for success.
a
Stay in the Know
Part of ensuring your business’s finances stay on track is monitoring your income, expenses, and bank statements. Without the right knowledge, you won’t be able to make sound financial decisions for the business, or catch slips (or fraudulent activity) when they occur.
Make no mistake, businesses are just as susceptible to financial fraud as individuals are. Cybercrime, financial fraud, fraudulent credit card accounts; these are all things you may encounter while you’re in business, so keeping a close eye on your bank account is a necessity.
You’ll always want to know how much money you bring in each month versus how much goes out. Form there, you can create a working budget for your business and put spending limits on certain variable expenses to reduce the overall of running the business itself.
Speak with an Expert Advisor
If managing finances isn’t your strong point, there are plenty of financial experts available to help you get a grip on what’s costing you money. Financial advisors will work with you to help identify key issues with your business’s finances, and provide you with expert advice on how to get things back on track.
Even if you are good at money management, you may be unsure how to reinvest your profits, or even which financial direction you should take for the future of your business. A certified advisor can also help with these decisions, granting you a second pair of well-trained eyes to observe and report.
If you’re looking for an advisor, compare financial advisors on Carefulcents.com to ensure you’re getting the best possible service for your business. With thousands of financial advisors available, you’re certain to find the best one for your specific situation!
Don’t Forget to Pay Taxes!
Filing your quarterly taxes is a must for businesses. You’ll want to be sure that you’re staying on top of your tax costs, to avoid any outstanding balances and problems later on. You can be penalized in the form of expensive fees for not filing your taxes, and with enough violations, you could be put out of business altogether. Do not forget about your taxes!
If you’re not sure if you’re filing taxes accordingly, or how/when you should be filing, hiring an accountant for your business can be a serious asset. As the business owner, you can’t possibly perform every task associated with running the business. Leave the money side of things to an expert to ensure accuracy and punctuality.
You’ll also want to keep up with any local or state tax requirements, such as state sales tax. You’ll need to charge sales tax on certain items in certain states, and this money should go directly to the state government. Not filing state sales tax can leave you with extra penalties that add up quickly.
Reduce Expenses
Once you’ve taken a close look at your business’s finances, it’s time to formulate a plan on how to reduce your expenses. The more you reduce your expenses, the more money you have available to address other things like damages, new inventory, or marketing costs. You want your business to run as lean as possible; minimal expenses, maximum profits.
Expenses can be reduced in all aspects of your business; from materials to production methods to reducing overhead by choosing a different location or moving the business to the web. The key is to find a happy medium between cost reduction and maintaining quality. You don’t want to reduce your material costs by drastically reducing their quality. This is a surefire way to upset and possibly even scare off a large portion of your customers.
Don’t forget about costs like insurance and energy either. Energy costs can usually be reduced by taking a more green approach to running your business, or by changing providers to get a cheaper rate.
Have a Plan
Whether you’re opening up shop in San Jose or creating an online business, having a backup plan in the form of emergency savings and a plan for the future are both integral to the success of your business. If you don’t know where you’re going, it can be difficult to navigate challenges without a solid goal in place. Additionally, if you fail to plan for lean times, you could end up going out of business with no capital to work with.
Keep your goals in mind, and always have a backup/emergency plan. This should be funded as soon as possible and kept in a high-yield savings account ideally. Remember that the emergency fund is only for emergencies, and should not be used for expansion, new products, or anything else.
Conclusion
Getting your business’s finances under control starts and ends with financial awareness. You must monitor your bank accounts, income, and expenses at all times. Look for places where you can reduce costs without sacrificing quality, and if you find yourself struggling, don’t be afraid to hire a professional advisor to help out.
