Four tips for managing your business finances
One of the hardest parts about running a business is managing your money, but it’s also one of the most important things to get right.
Failing to get a handle on your finances can lead to disaster further down the line – the last thing you want is for your business to fold before its hand the chance to get up and running. If you’ve been finding it hard to stick to your budget or have never been particularly good with money, then this blog has some helpful tips to make getting on the right track a whole lot easier.
1) Save money
While it’s easier said than done, identifying ways that you can cut costs and save money is the best way to keep your budget healthy. While you might be reluctant at first, it’s important to recognise that cutting back on your spending doesn’t mean compromising the quality of your services.
There are lots of places where you could be inadvertently wasting money, such as your energy bills. Think about whether you could be switching off machines and appliances or moving over to renewable energy sources. Before making a big change, take some time to understand PPA structures and really get to grips with how energy use can impact your finances.
2) Use accounting software
If you thought budgeting was difficult, filing your tax return is a whole other minefield. One of the biggest obstacles entrepreneurs face when starting out is getting to grips with VAT and the many tax codes that are out there.
While it is possible to make all the necessary calculations yourself, you can save yourself a whole lot of time by getting software to do it for you. This will give you the peace of mind that all your calculations are correct and allow you to focus on more important things, like keeping an eye on your profits.
3) Hire a professional
Sometimes your own grasp of your finances won’t be enough, which is when it’s time to hire an accountant or financial advisor. They can help you with all kinds of things such as loans, investing your money, and day-to-day financial planning. If you don’t think you have the money for an accountant, pay a freelancer on a one-off basis to get the information you need before making a big decision.
4) Reinvest your money
It can be tempting to hold onto any profits you make, but reinvesting your money into your business will help you to become more successful in the long run. This could mean using your extra cash for things like building a better website, paying a marketing strategist or even getting new equipment you desperately need.
Don’t forget, you can also invest some of your profits in stocks and shares to try and grow your money even more. Alternatively, use your money to develop your own skills and take a course to learn more about web design or SEO. You may be able to expand your offering to better help clients once you have the relevant qualifications.