Many of you own a small business. How many of you know how to balance your finances? If you are having trouble, Doug Foshee financial expert provides a few tips to help your business succeed.
1) Learn to separate your money. Figure out how much you need to make each day. Are you going to make enough to break even? You need to create a healthy balance between needs and wants. Not everything you want falls into the “needs” category. Figure it out. How much are you looking to spend on the daily upkeep? Will you have enough to keep everything going? These are all things you need to think about.
2) Don’t get into the habit of spending. Spending is overrated. You need to get into the habit of investing. Investing is where it’s at. You need to invest in something which will serve you in the long-term. You need to be careful with this strategy, though. Always look at what is going to be a pay-off for you. Do a cost-benefit analysis. Are you going to see the benefits at some point? What is going to happen when you don’t see the benefits? How will your business handle it? Factor these things in.
3) You need to keep everything organized. This is important. Why? There are lots of reasons why records get lost. Owners lose them at some point. They get thrown away, without even realizing it. Some of the records weren’t even kept. This happens a lot. Sometimes you think you kept papers, when you never did. It happens. Some things just don’t get written down. Other times, you can’t make your own writing. This also happens a lot. You end up being in a hurry. You write things sloppy, thinking you will remember what it said later. Later on, turns out you can’t make sense of it. This is why you need to keep everything clean and organized, even the most simplest of things.
4) Keep your business and personal stuff separate from one another. Don’t confuse your personal living expenses with your business. You want to spend money on your business, so get one of those dedicated-fro-business cards. Normally I’m not for credit cards, but this one might be a good one to have. Get one with a fixed-rate. This way you can keep track of everything you are spending. Why? You don’t want to take money from your personal account, only to find that you have no spending money at the end of the month. This is the money you need for bills, wasn’t it? Avoid this problem altogether.
5) In any business there are two types of costs. There is the fixed rate and the variable rates. The fixed rates are what you need to survive. This is the money you need to spend, whether you make money or not. The variable rates are what comes in on a daily basis, These rates will fluctuate, which is why they are “variable.” You have to know how to cover the costs.
In order to make your business work in the beginning, try bartering for services. Take advantage of the free stuff. The trick is to stay lean, without losing your customer base.