Congratulations on starting your business venture. We know how difficult it is to own and run a successful business. Although it is a great achievement to successfully run a business, it is essential that you manage it well and that your business survives the financial crisis that it may face.
From the moment you start your business, your success is and will be determined by the choices you make. Some of the many choices that you need to make would be,
- Should you apply for a business loan?
- Will you able to repay the loan in the given period?
- Will you able to pay your supplier?
Such choices and many others is what that will determine your business success. However, few business owners end up making poor choices while most other tend to make poor business decisions.
In fact, the most challenging and difficult part of running and operating a successful business is effective management of its finances. So the obvious question here is: how can you keep your business finances healthy?
Read on to find out.
1: Keep track of all business expenses
Even though you have a professional accountant or a bookkeeper to handle your business finances and records, you should also keep a track of all your business expenses. Additionally, you also need to have a file of all the receipts.
For all the business leaders that are not so great in handling business finances, remember that some of the basic business expenses are:
- Office supplies
- Motor expenses
2: Taking care of all the taxes
We understand that taxes can be difficult to handle just like your exes. But there is no escaping from either of them. However, when it comes to your business, depending on its size or your locality, taxes tend to come as a huge financial blow.
This gets difficult to handle especially when you are unaware of your region’s tax regulations and policies. For the matter of fact, there are certain deductible expenses that decrease your tax liabilities like renting an office space, leasing an office vehicle or renting a warehouse. Such things can lower your tax liabilities since such expenses are considered to be tax deductible expenses.
In the end, it is the duty of the business owner to get familiar with the numerous tax benefits. There are few setbacks that you may experience due to tax avoidance or evasion which will surely bring your business down. Therefore, make sure that you regularly pay taxes.
3: Get a business loan
In some situations, your business is ready to grow but finances don’t tend to play along. But if you indeed want your business to grow, you must be able to invest huge amount in things such as advertising, marketing, property and equipment.
However, these requirements come along with some additional expenses which most growing business cannot afford. So, the best way you can fund your business growth is by seeking help.
There are several alternative finance firms that help start-ups and growing business when it comes to finances. They not only provide financial support but also provide guidance to businesses in need.
4: Spend within a set budget
One of the biggest mistakes business owners can make is to spend the money that they don’t have. Therefore, it is necessary to build a habit of spending the money that you can afford and is the core of healthy business financial status.
When you spend less than what you actually earn, you get to save some good amount for the future advancement. Thus, registering all your expenses is essential. This way, you are well-aware about what your cash inflow and outflow is.
5: Draft a long term financial plan
No matter what the status of your business finances is right now, it is essential to have a long term financial plan. It is your responsibility as a business owner to make sure that the future of your business remains strong. And this could be well achieved with the help of a financial plan.
Therefore, take some time out and think of where you want your business to be in the next 5 years. Write down your financial plan and put in all your resources and energy in accomplishing them.