When you’re running a small business, there’s no denying that you have to wear a lot of hats. From marketing and promoting your business to dealing with the customer service aspects and trying to grow and scale, there’s a lot of areas of business you need to be aware of. Included in this topic are finances and accounting.
While you may not have the skills to be an accountant or managing the accounting aspects of your business, it’s essential that you do spend at least some time getting your head around how it all works and what is happening with the financial side of your business.
That being said, today we’re going to go through some tricks and tips you need to know to stay in control of your finances, some lingo you need to know, and how to stay successful.
Spend Time Doing Math
This may seem like an obvious point, but it’s important you take time to do the math relating to your business, so you have a clear idea of what you’re up to, how much it costs for your business to run.
You need to think about the true costs of your products and services, and then add together all the bills, including rent and insurance, phone and internet services, and taxes. It can be easy just to judge your business based on underlying costs, but there’s a lot of costs on top of these that you need to remember to add in.
This is an important step when it comes to learning how to monitor and track the money that comes in and out of your business and will help you to set prices that will keep you profitable.
Discover any Hidden Costs
Within any business, there are going to be costs out there that you’re not aware of, and if you don’t consider them and then discover them, they’re going to mess with your finances terribly. Consider the costs of licenses you may need to purchase, the cost of any legal services you use, and even your own salary.
Think of other costs like how much money you need to be returning and paying back to your investors and money you’re putting aside to grow your business in the long-term. The more organized you can be with your finances, the better prepared you’ll be for any eventuality.
Get Professional Assistance
The chances are you’re not going to be the best accountant in the world, and you definitely won’t have time to properly learn if you’re managing your small business. This means you’re going to want to get a professional accounting service or individual.
Look for an accountant that specializes in small business workings, and they should be able to manage everything on your behalf. However, it’s important to make sure you’re asking questions to your accountant and not just letting them get on with handling everything. The more questions you are, the more knowledge you’ll have on business finances, and the more knowledge you have, the more proactive you’ll be at managing your business finances better.
Check Out the Competition
When it comes to the actual business side of things, such as providing services, kitting out your shop or office, hiring people and paying salaries, and creating and buying in products, you need to make sure you’re researching your competition.
This way, you can see what others are paying and thus work out how they remain profitable. Of course, you don’t need to exactly duplicate your competitors, but it can be a great way of gauging costs so you can organize yourself better and make more accurate decisions.
Likewise, if you’re working in collaboration or partnership with anyone or any other businesses, you can compare costs and work with your peers to gauge how everything works.
Embrace Technology
We live in the 21st Century, which means there’s an app for everything, and the truth is, there really is. It doesn’t matter what aspects of your finances you want to manage; whether you’re tracking your spending, monitoring your accounts in real-time, managing and recording invoices, and even predicting financial forecasts, there are apps and software out there that are designed to help you do it easily.
While we’re not suggesting you download every app under the sun, it can pay to spend time researching to see what’s out there, perhaps in relation to a financial problem you’re trying to overcome, and then seeing if there’s an available solution that works for you.
