Money talks, and if you’re a business owner, it’s got an especially loud voice. As Forbes notes, eight of ten businesses fail and, for the vast majority of those, the reason is that they simply run out of money. So, how do you avoid falling down a financial black hole? Here are some steps to take to ensure that you stay on top of your money, rather than letting it get the better of you:
Keep costs as low as possible
You need to be ruthless when it comes to your costs. The more you spend the more likely you are to stretch your resources past your limits. For every piece of hardware, software or any other resource ask yourself:
- Do I need to spend money on this?
- Do I need to spend this much money on this?
- Do I need to spend money on this now?
Sometimes you can be a victim of your own success. If things take off and you start to perform well then it can be tempting to get carried away. If you start employing too many people in a short period of time or take on too many orders, for example, things may quickly spiral out of control.
Startups need a strategic plan, setting goals for the small, medium and long term, with an idea of how to get the funding you need to fuel this growth. You can update or adjust your longer term goals if things go better than expected – but never lose sight of the importance of smaller goals that can keep your feet on the ground.
If you can’t manage your accounts properly then you’ll never be able to keep your finances in check. Being able to keep on top of your books is vital, and if you don’t want bookkeeping to take too much of your time and effort then you should consider investing in the support of some accounting software.
Systems such as those from QuickBooks can allow you to track the payments in and out of your business and help you with everything from business envelopes to deposit slips and tax forms – all important fundamentals for the day-to-day running of your business.
Keep business and private separate
Don’t allow your personal and professional finances to become intertwined. That’s only likely to result in confusion – which won’t help you to stay in control. Instead, keep separate accounts and even credit cards for your business and file receipts and paperwork in different locations (both in paper and electronic formats). It’s a simple-but-effective piece of advice that ensures things do not go amiss.
Get some advice
Tempted to ignore a financial problem in the hope that it will just go away? This never ever works. There’s nothing wrong with reaching out for help and support. Plenty of people will have been through – and overcome – the same challenges as you. Expert independent advisors will be able to tell you a few tricks of the trade – and give you quality advice that is tailored to your needs so that you can act quickly and decisively and stay on top of your finances.