MONEY MANAGEMENT TIPS FOR SMALL BUSINESS OWNERS

HAVE AN ACCURATE BUSINESS PLAN

I’m not talking about the 50 page document that feels like pulling teeth to actually write out and never sees the light of day after you’re done. I’m talking about a realistic, straight-forward business plan that you can use to guide your operations, development and financial goals.

HAVE A BUDGET AND STICK TO IT

Part of having a realistic business plan is having a budget. Admittedly for a lot of people, the word ‘budget’ alone is enough to get the eyes rolling. Budgets are not exactly exciting or fun to the majority of people – that’s why it’s a good ideas to have a numbers person on-hand.

There are a lot of other parts of running your small business that will be fun; when it comes to budgeting though, don’t ignore it, get yourself a measurable, and realistic budget, and map out your projected cash flow. These will create the foundation for your business goals.

Your budget cannot be considered ‘realistic’ if you don’t or can’t live within its parameters.

KNOW YOUR NUMBERS

Track everything that you spend, no matter how small. The bigger things are easier to remember, but it’s the small stuff that really adds up. Book some time in your calendar every month to look at your numbers.

When you are figuring out what to charge for your products or services, the first step is to know your numbers. You need to know all of the business expenses. Your time involvement is also a huge factor to take into account.

REDUCE COSTS

Sounds simple, but we often get caught up in the day-to-day running of the business that we forget to look for new opportunities to streamline systems and processes, or seek out new cost efficient ways of delivering products and services.

There are a lot of costs when you are setting up and starting out in your business. And every year there are additional costs, ongoing overheads, and things that need fixing or replacing or upgrading. Reviewing your numbers regularly, or checking in with your accountant and bookkeeper, can help you establish areas where you can save money.

PUT MONEY BACK INTO THE BUSINESS AND DONT FORGET TO SAVE

There are two main things you want to do if you are running or growing a small business. The first one is pay yourself. The second one is to have more money to put back into the business to keep it going.

What is the point of even having a business if you are NOT saving from it? Always save.

DON’T UNDERESTIMATE

Under-quoting is a very common problem in small businesses.

In small business, an hour is never just an hour, a product is not just cost plus profit margin. It’s also administration, research, training, accounting, marketing, networking, HR, travel, cleaning, and all the other little things that are involved in running your business.

Consistently underestimating is going to cost you BIG time in terms of lost revenue so it’s important to understand your expenses and price your products and services accordingly.

BE PROACTIVE AND CONFIDENT WHEN ASKING FOR MONEY

If you are new to small business you may have always relied on a steady wage dropping into your account regularly. But when you run your own business, you have to ASK to get paid. Sometimes it feels like this is all you do and it’s often the biggest mindset hurdle new business owners face.

Getting help with your money mindset, while it sounds a bit woo-woo, can actually save you a lot of money and time in the long run. A money mentor can help you with this.

CREATE A LIST OF STRATEGIES TO INCREASE CASH FLOW

In small business, money and work can come in highs and lows.

For the low times, it’s handy to have a list of actionable cash flow injection strategies to boost your bottom line quickly.

This type of cash injection would be specific to your business, but could include:

1. Have a flash sale

2. Create a bundle offer

3. Create a special offer for existing clients

4. Offering incentives to current clients for referrals

5. Create incentives that encourage customers to pay early

6. Offering a one-to-many event or training

CONSISTENTLY REVIEW

There is always something new happening, a better way to save money, or opportunities to grow your business.

There are always new ways to find new customers or increase your existing customers. But you can never see these opportunities if you don’t manage your money well and know your numbers.

Make it a priority to review your numbers regularly, to have a strategic plan (both business and personal) to work towards, and to think smarter about money.

Money management is critical to your business’ long-term success.

Outsource to keep your books up to date so you have accurate figures, work with a professional to build a budget you can stick to, or get cash flow projections to plan and budget accurately.

This may mean a bookkeeper or an accountant. At HM Accounting we can help. Contact us to let us know what you need help with.

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