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We all know how hard a small business owner feels when things don’t go as planned. It’s easy to say “this could be worse,” but you should remember that this time is different. When you’re starting out—especially when you’re still dealing with an unknown future—it can feel like life has hit bottom. So start taking this moment as your guidepost instead. Here are some ways to use cash flow to better manage your company and keep it thriving.
Make Budget Plans for Everything You Need
When running a small business, making financial decisions can seem overwhelming. But that doesn’t mean you can’t make them well. Plan for everything you need, from payments for inventory to taxes, payroll, invoices, and even marketing expenses like ad campaigns or website maintenance. Once you know what you have coming in and what you want to spend, it becomes much easier to budget and plan ahead. Knowing you have enough money set aside for everyday expenses can help you avoid spending frivolously on unnecessary items.
Look at Your Current Cashflow Instead of Spending Alone
When the first few months of starting a business are tough, do yourself a favor by doing something you may not have done before. Check with your accountant or bookkeeper about where your current cash flow stands. They might offer some insight on your business finances that you hadn’t considered before. Just knowing that you’ve been operating smoothly for longer periods will help convince you that there’s nothing crazy about your balance sheet. If you don’t already have one, it’s okay if you don’t have anything at this point. At least you know we can count on you to meet our obligations when the time comes.
If you’ve been saving until now, consider doing so again while maintaining a buffer to cover any unexpected costs. Even if you weren’t able to save up for years into the future, there are many ways to begin repaying that debt. With every penny you put away, you’ll be one step closer to finally paying down any outstanding loans. Taking advantage of these deductions can give your short-term debt repayment goals a tremendous boost. Not only will you get back more than you originally owed, but you’ll enjoy peace of mind knowing that your company has a strong foundation to fall back on.
Managing Money Means Doing Work
If you just let your accounting work and bookkeeping take care of managing your books and keeping tax records organized, you run the risk of wasting your time. While being too busy with bookkeeping and your other responsibilities can lead to missing important deadlines or simply procrastination, overworking your employees can have adverse effects on everyone’s health, productivity, and morale. Instead of putting off important tasks or chores, delegate some of the weight onto someone else who knows their job inside out. Whether you choose to hire temporary workers or hand them complete control over projects, delegating is always the best option. Delegating means finding the right person at the right price. Look for people that have some experience working with your industry so they don’t waste time trying to figure out the perfect solution for your problem. If possible, find another employee that gets along with your business well in order to create trust between them and you. This way, you can both benefit to some extent without having to worry too much about hiring or firing bad employees.
If you’re struggling with your finances, try looking at options outside of solely borrowing money to fund an expensive overhead cost. Consider consulting one of our professionals about various financing options available. Most businesses are hesitant to borrow money unless it’s strictly necessary, but it’s definitely worth considering alternatives if your capital structure allows it. One of those alternatives is offering your customers interest-free credit cards to pay off their monthly bills while you focus on growing your business. There are plenty of benefits to using this financing method, such as building customer loyalty and improving cash flow efficiency. And once your business grows and profits improve, this will allow you to repay the loan in full over time.
Pay Yourself First
As soon as you sign your lease, your landlord will need to reimburse you for your share of rent based on the agreed-upon payment terms. That includes things like utilities, insurance, internet, telephone, cable TV, computer equipment, paper costs, heating, and lighting. Depending on your location, most leases include additional costs such as property damage liability coverage that protects against damage caused by the customer. Other common lease charges to look out for include phone, parking fees, mail, and pet fees. Since the purpose of leasing is to make sure you get paid on time, sometimes landlords end up getting penalized if they fail to do so. In general, renting your property for a long period of time can lead to lower rates or charge penalties if you aren’t up to date on your monthly rental payments.
How to Make Good Decisions About Finances and Management Skills?
Being prepared for big, unexpected challenges and having solid resources can help you survive when you inevitably encounter obstacles that come up. After all, no matter how high the stakes are, you still got to go head-to-head with the pros. Being prepared for unforeseen changes can help you avoid making costly mistakes that impact your ability to grow your business and succeed. By learning how to handle and deal with money, you'll be primed for success every single time you need to pivot your strategy and move forward with confidence every step of the way. All it takes to learn how to handle and think better about money should be some kind of skill you’re interested in learning. Take note that developing these skills is not the same as having a set formula for handling cash flow. Rather, it involves thinking strategically and applying critical thinking capabilities to make informed decisions. From the tips above, we hope that you’ve found a valuable resource that can help your business thrive.