Every business should have financial goals. After all, without them, how will you know where your business is headed? Just like every person should have goals, financial and otherwise, your business should too. And financial goals in particular all have one outcome in mind: financial success. And of course you want that for your business so while these are usually personal goals consider their adaptations for business.
Spend what you have and not more. This is the number one lesson in personal finances. Don’t borrow money to pay your bills, not in your own life and not in business. All this does is result in you always being behind on your bills and never being able to get ahead. Your time will be spent trying to find funding. When that doesn’t work you may have to research how to apply for a personal loan online so you can fund things for a while. There’s far better ways you should be spending your time. You should only borrow money for your business for the biggest expenses – like a bond to house your offices or a loan to move your business forward with clear outcomes and payment terms defined.
Keep your expenses low. When it comes to your personal finances, this speaks to living in a small home and driving an affordable car. In business, this is relevant in many different ways. There’s really no need to have your office in the fanciest part of town. Simplifying simple aspects of the way you do business can have a major impact on your bottom line. And the good news is there’ll be almost no detriment to you or your staff.
Avoid unnecessary expenses. Yes, you want to provide lunch to your workers every day. But you don’t need to buy expensive takeaways daily. Those kinds of costs add up quickly and can lead to you having to retrench staff. And they’d much rather keep their jobs than have burgers or pizza every day.
Increase your business’ net worth. In personal finance, this one is simple. Pay off all your debts and have money saved so you won’t have to work again. Your business works in the same way. Pay off your debts and loans. Turn a profit monthly so you won’t have to worry about covering your expenses. Have money left over at the end of the month so you can pay yourself a salary, share profits with staff and reinvest what’s left over into the business.
Now that you’ve set goals for your business, how about giving your business finances a makeover? Sometimes you feel a little tired and in need of a break, a refresher and new start. This can happen to your business too. If your business is fairly old and has been around for a little while, it could be running automatically. And that’s when you know it might be time to give your finances a makeover. These tips might help to bring some much needed enthusiasm into the finances of your business.
Separate personal from business. This step shouldn’t need to be mentioned. There should be absolutely no overlap between your finances and that of your business. Yes, it’s easy to just reach for the nearest credit card when you’re at the grocery store. But that should never be done. A business bank account is totally essential for responsible management of your businesses finances.
Create a budget for your business. A budget is essential for you to manage your own personal finances. Your business is the same. The reason they’re so ubiquitous is that they work. Make sure to look at your budget constantly and make adjustments. It’s important that you ensure your spending is in line with your budget.
Automate your business expenses. Make sure that all recurring expenses are automated. This could be your rent, salaries, utilities and so much more. This will make your life just that little bit easier every month. As a business owner, you have a lot of balls in the air that you need to juggle. You’ll want to make sure everything possible is automated so they can happen without you even thinking about them.
Pay off debt. Carrying debt is never a good thing, not for you and not for your business. Of course, sometimes it’s necessary. Sometimes you might even need it to grow your business. Make sure you make an effort every month to pay off your debt as quickly as possible so that you avoid paying too much interest.
Keep a close eye on your bank statement. If you don’t keep a close eye on your bank statements, you may miss something important. A missed payment, a scam, a double debit – all of these are possible. The only you’ll know is by spotting it yourself. A good idea is to use your bank statements to compare against your income statement and balance sheet. This’ll enable you to see how your business is progressing and to find any potential problems.
By following these steps, your business finances will soon be refreshed and it’ll be ready to grow. It’s important that you take some time to think about your business and its goals.