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6 Smart Tips for Small Businesses
June 26, 2017
#1 Borrow the Right Amount of Money at the Right Time
Business is all about planning and preparation. When you are looking to borrow money to startup or expand your business, take the time to know exactly how much you need and exactly when you will need it. You need to know and understand your business in order to plan the specific time you will need the money and where it will go when you have it. If you borrow money too early, you may be tempted to spend the money on things you need now instead of you business plan. If you borrow too late, you could put unnecessary financial strain on your business. You will also need to know exactly how much money you business needs, not just your best guess. You will need to determine a full review of your projected costs and revenue including positive and negative projections. If you borrow too much money, you business will have more debt that you need to repay. However, if you don’t borrow enough, you could fall short of the cash your business needs when unexpected expenses arrive.
#2 Focus on Meaning, Not Money
Small businesses that are the most successful create meaning. Most small business owners do not go into business to simply make money. Small business owners usually go into business to become more independant, choose who they work with and they are passionate about the business they are starting. Most small businesses that are successful are taking their passion and creating something new, not just offering the same type of business you can find down the street.
#3 Create A Team That Supports Your Vision
Businesses are based on people, not just money. Your team should have industry experience. The better your team, the better your business. A great team will help you attract investors, entice new clientele and maintain long-time customers.
#4 Budget EVERYTHING!
Successful businesses use budgets and realistic sales projections. You need to keep track of all revenue and expenses. Your budget should be used as a planning tool to determine how your money is spent. Your budget will help you attain your goals by determining how much money you can spend on different elements of your operation. When a business owners use a budget, they do not spend money on travel, events or trade shows that are not budgeted. They do not hire staff without have the money or contracts in place in advance. When creating your budget , you will need to understand how to use a line of credit. This will allow you carefully plan for short-term cash needs, and not long-term funding needs. Creating and adhering to your company’s budget is the key to success for your business.
#5 Prioritize Proper Accounting Methods
Accounting methods refer to the basic rules and guidelines under which businesses keep their financial records and prepare their financial reports. There are two main accounting methods used for record-keeping: the cash basis and the accrual basis. It does not matter which method you use for your business long as you maintain a current accounting method. Your accounting provides critical information regarding your company’s financial performance. This information allows business owners to make better financial business decisions.
#6 Hire Professionals!
Small business owners aren't expected to be an expert in the finance, accounting, bookkeeping, payroll and legal side of the business. In many cases, it is worth the money to hire a professional to handle these critical business needs. A great bookkeeper can not only maintain your financials, but free up time for you to focus on your business. A payroll professional can help you avoid errors and are current with all of the complicated, changing legislation and tax obligations that can impact your business. An accountant can not only provide you with your corporate taxes, but also offer financial advice specific to your business throughout the year.