Business Owners: 5 Tips to Stay on Top of Your Finances

If you are a small business owner, then it is a certainty that you are more than aware of the importance of operating well within a carefully planned but relatively limited budget. Whether you started your business with minimal capital, or borrowed to cover start-up costs, you will be fully aware of the importance of being frugal with your money.

However, if you have not compiled a comprehensive budget plan, if can be somewhat troublesome when tracking and managing your company’s finance. Without proper planning for the financial year ahead, it is possible to underestimate the amount of outgoings that your business will encounter; there are numerous hidden costs involved in running a small business that any small business owner can attest to and confirm.

Overestimate Your Expenses

There are numerous small businesses that operate on a project-to-project basis, it is imperative not to assume that two projects will be the same. Essentially, this means that this type of work can prove to be unpredictable, making it difficult to accurately plan for every single associated cost.

Therefore you should vow to overestimate your expenses in order to ensure that you are protected should any additional unexpected costs accumulate over the course of the financial year.

Invest In Business Management Tools

This is one option that is imperative if you are looking to expand your business and ensure that all of your capital is allocated fully and appropriately. While it may require significant outlay, corporate performance management software enables you intuitively plan your finances for the year, while at the same time, being able to compile highly accessible reports from the a dashboard and effectively plan and monitor your results.

While this may seem somewhat excessive if your business is relatively young, this is an excellent way of successfully managing your finances if researched and utilised correctly. This is one investment that I cannot recommend highly enough, and I can assure you that you will soon appreciate its value as it swiftly and effectively transforms your finances.

Regularly Review your Budget

Sadly there are not many components of business that remain static; just like life, your business will evolve over time and you will need to be prepared to revisit, evaluate and adjust your yearly budget based on your growth and profit patterns.

This allows you to take greater control of your financial decisions due to the fact that you will have a greater awareness of what you are able to spend compared to what you are projected to make over the course of the entire year. Remember that it is imperative that you take market trends into account from the previous year to better inform your decisions.

Become Aware of your Sales Cycle

Most businesses go through busy and quiet period over the course of the year and if your particular niche happens to have an ‘off-season’, then you will be required to plan for this accordingly to ensure that your expenses are all accounted for during this period. I would also highly recommend utilising these slower periods to plan accordingly for your busier periods.

This also poses as an excellent opportunity for you to assess and evaluate any marketing efforts that you may be engaged in and seeking ways in which these can be improved in order to ensure that your small business continues to thrive.

Don’t Waste Time

This is one is something of a common mistake amongst those who are relatively new to the sector and can lead to a lot of frustration if it is something that is not taken into consideration from the outset; this is all the more important if you employing individuals as well.

Underestimating the amount of time it takes to complete tasks can quickly escalate into an abundance of money coming out of your initial budget and lead to cut backs in other areas of the business.

With this in mind, it is important to treat your time as you do money, over the course of the financial year it will prove to be extremely advantageous to overestimate the amount of time that it will take you to get work completed. This not only ensures that you give the impression that you are incredibly organised, but also highly efficient, which will impress your clients and in turn boost your company’s reputation in your sector.