How are you staying on top of managing your business's finance?
Posted on 21st April 2022 at 09:26
You have jumped in with both feet and are now a small business owner. This comes with tremendous responsibility and dedication in all aspects of your business. An area that demands a good amount of your time is your business’s finances, an area that needs you to have your finger on the pulse at all times.
Creating a structured business plan for your business will allow you to keep on top of your current expenditure, bills, profit and loss, and that all important cash flow. By analysing all these areas, you can correct what is not working, action goals and forecast for the future growth of your organisation. Understanding the basic financial concepts of small business finance is a vital step in securing the future growth and goals of your business.
What you need to know..
Did you know that half of small businesses don’t make it past the fifth year in business? Here we share with you our tips to assist you in long term financial success:-
Upskill and get to know the basics: 82% of businesses fail due to cash flow issues? Upskill and learn the basics, this will give you the tools to pick up red-flags before they cripple your business.
The all important profit & loss statement: Your profit & loss statement is an important document that gives you insights into your working capital and will help you get a loan when the time comes. Your profit & loss statement assesses your overall business revenue, profits, and losses, which will give you an understanding of your business’s overall performance and what steps you need to take next.
Budget Statement: Start by listing all your expenses, from bills, interest rates on any loans, income sources, sales, interest on investment etc.. By doing this exercise you will see the bigger picture and account for every penny that comes in and out of your business
Credit Score: Have you checked yours lately? Both personal and business? This is a very important step in moving your business towards success. Without a squeaky clean credit report, you will experience a lot of dead ends. It is vital to keep a good credit score as it will assist your business and increase your chances of obtaining funding, as well as receiving better interest rates on loans approved.
Keep track of your debt: It may be any sort of loan or the money you used to start-up your business to purchase assets. It is imperative to keep track of all the money your business owns from borrowing. Remember, rates of loans may change over time, which will affect your bottom line.
There are many steps you, as a business owner, must take to ensure that your finances are aligned. Running a business isn’t easy. If it was, everyone would be doing it. With your finger always on the pulse and trying to juggle it all, it can get somewhat overwhelming. Remember, you cannot do it all and be good at it all. Hire professionals in areas where you feel overwhelmed or that are just taking up too much time. Lastly, always make sure you have your eyes on your finances! Watch your budget, because budgeting is your best friend!
If you would like to find out more or chat about what options are available for your business, give us a call on 020 3325 8000 or email Gillian Palmer at firstname.lastname@example.org - We are more than happy to have a chat and answer any questions you may have.
Tagged as: Business Finance, cash flow management, Cashflow, Credit Score, Finance, Funding, Lending, Lending Made Simple, Loans, SMEs
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