Making that bold move to create a business from scratch is something to be proud of, but many business owners can struggle with their finances. You might have an incredible product or service, but you have to be able to cook the books as well. There are quite a few tricks to improving your finances though, so read on for the top four.
- Create a roadmap
If you’re going to get a leg-up on your finances, then creating a roadmap of company developments for the next couple of years is essential. You need to have a strong business plan in place that gives you a focus and a definitive way of moving forward, but you should also work out all of your true day-to-day running costs. Leave nothing out, from transportation and wages to gas and electric, and that way you’ll be to put realistic goals expectations of growth into your road map.Then, ensure that all departmental progress is monitored regularly to assess whether or not these targets are being met.
- Read around your accountant
Basically, you need to know the law when it comes to your industry. By now, you’ve probably hired your own accountant to take care of your financial needs, but you should still have at least a basic knowledge of tax law for your industry. There could be dozens of government schemes set up for small businesses just like yours, but your accountant isn’t obliged to tell you, or may not even know themselves if they aren’t specialists in your field. If you take some time to learn the terminology and keep up with industry changes, it could point you in the direction of numerous benefits.
- Wipe your debts but keep the accounts
In the beginning, your business may depend on personal credit, so it’s important that you do certain things to ensure a good rating. The best thing you can do is to clear any outstanding debt against your name, but always keep the accounts open, as credit scores are based on a ratio across your accounts. For example, if you have three accounts and two of them have outstanding debt, clearing one of them and closing it straight away will impact negatively, as it’s now 50% of your accounts rather than 33%.
- Investigate business credit
Switching over to business credit will give you protection over larger purchases and enable you to fund pricey periods of expansion.In order to get business credit, you’ll need to build a good business credit history via the setup of a credit profile, which details all payments and transactions between you and your customers. Once a vendor is satisfied that you’re a good company for investment, make sure you build on it by making payments on time and so on. You can also check your business credit on a regular basis so that you know if any black spots are developing.
If you’re a small business looking to improve your finances, why not leave a comment with your story?