As a small business owner, you need to be careful with your finances when you start up and you need to treat every penny as carefully as the pounds.
Starting up a business is a very risky thing so you will want to keep the initial investment as minimal as possible, just in case it doesn’t work out.
Then trick is being sensible with your business’s money and grow gradually. Here are a few things you can do to make it easier to manage:
When you are just starting up, protect what money you have and be very aware of where your money is going. Think about all your start-up costs and decide if there is a cheaper or more efficient way of spending your money.
Some considerations for you; do you need an office or can you work from home, do you need a desktop or is a laptop or tablet more suitable for your needs and where should you base your business; make sure you are accessible to your customers or suppliers.
Keep an eye on it
Monitor your finances on a regular basis. Ideally you should be checking out your bank account at least every week. Keep an eye on all your costs and your profits.
Check out how much your outgoings are costing you and if you are working outside your means, shop around to reduce your costs. If you find you are paying too much for a service, see if you can get a reduction, if not find another supplier who can promise you a better deal.
Always remember to have a contingency pot of money in a savings account just in case you have a bad month.
No one is an expert at everything, but that’s ok! If you really aren’t hot on managing money or legal issues, let someone else do it. Whether you get an accountant, specialist lawyer or a financial advisor, it may seem like a lot of money to spend but if you are not confident about how to do your tax returns, don’t understand the legal restrictions or if you don’t understand financial services like invoice financing, then it is a worthy spend.
Take it easy! You may have a fantastic few opening months, great, but this does not mean you have made it and you need a bigger office. Bank any profits you make until you have a number of sustainable months and then think about expanding. You need to ensure that there is a consistent demand for your service before you spend more money by expanding.
If you have got your contingency pot and your business is making good money, why not invest it? This doesn’t necessarily mean getting onto the stock market, you can invest in assets.
Why not purchase a workspace, buy some more reliable and dependable stock, even buying laptops or other devices is a way you can create more value which you can sell off if you need your cash back. Take advice from a financial or business advisor who can advise you on the sort of things you should invest your businesses money in.
Be clever with it
Sometimes buying the cheapest is not actually the most cost effective measure. Buying in bulk can often save you money, just don’t buy too much and then have nowhere to store it! Another way of being clever with your cash is by haggling with suppliers for example; you can offer them a lengthier contract in exchange of a reduced cost.
The key to being clever with your money is simply to shop around. Get plenty of quotes from range of suppliers, find the best product for the price and see if you can haggle them down!
No matter what business you are starting up, you need to be precious with your cash and your assets. Take your time to make sure you are settled before you expand and ask for help if you need it. You can always learn from them and reduce their services as you grow as a business.