Money Matters: 5 Financial Tips for Small Business Owners and Entrepreneurs
Unlock business success with expert financial management. Discover 5 essential tips to stay ahead of the competition with smart money decisions.
As a small business owner, you're juggling many things, from research and marketing to sales and inventory. But when it comes to finances, don't let them take a backseat - they're the backbone of your long-term success. Managing your finances is essential for achieving your goals, and taking control of your money can be empowering.
In today's competitive business landscape, smart money decisions can set you apart. From planning and strategy to execution and progress monitoring, each step counts.
We spoke with Rebecca Trudgett, Business Strategist, Charter Tax Advisor, and Founder of Switchfoot Accounting, to find out the five key things small business owners need to know to take control of their finances and boost their chances of success.
- Prioritise planning and strategy: To take control of your finances, you need to know where you're headed. Ask yourself: "Where am I now?" "Where do I want to be? What will get me there?" Create two one-page plans, one for personal goals and one for business goals. Keep it simple and focused on charting a course based on the business goals, purpose, and vision.
- Execution counts: When working for yourself, accountability is crucial. Having someone to hold you accountable can help keep you on course and make intelligent adaptations when your plan changes. Seek support from a coach, the Inspiration Space, or your accountant.
- Don't forget profit margins and pricing: To start, figure out what you need from your business, including salary expectations, pension, work/life boundaries, and overheads. Based on that, calculate how much product/service you need to sell and at what price to reach your break-even point. Then, work out how much you need to sell above and beyond the break-even point to reinvest in the business and deliver the lifestyle you're after.
- Cash flow: Get in the habit of saving money in your business as you go. Set aside an appropriate percentage in a separate bank account every time you sell something. This tactic is helpful for saving 10% each month for your tax bill or annual expenses.
- The power of 1%: When trying to grow a business, it's easy to feel overwhelmed. Instead of focusing on massive growth, think about increasing your turnover by 1% every day. This consistent approach to small increases will compound and help you achieve your goals more quickly.
By prioritising planning and strategy, seeking accountability, focusing on profit margins and pricing, managing cash flow, and embracing the power of small gains, you can take control of your finances and set yourself up for long-term success.