Money management for small businesses
In business, it all comes down to the bottom line. Managing your money is the most integral part of any business and one of the hardest to get right. This is especially the case for startups and small business owners, both in terms of ensuring financial compliance and ensuring profitability now or further down the line if you’re working with investors. Here are some simple and easy tips for money management as a smaller business, including ways to use your size to your advantage.
Negotiate
If you really believe in your product or service, you should know its value and be able to communicate that to potential customers effectively. Emphasise the advantages your business may have over the competition, especially the agility that comes with being a smaller business. This goes the other way as well. While this may be difficult for smaller businesses who lack the clout to get sweetheart deals, you may be able to leverage your smaller size to get a more reasonable price for any supplies or services who attempt to procure, especially if you’re able to effectively communicate and emphasise your business’ potential for growth and a resulting growth in potential contract renewals. Be sure to dig into the detail as well, negotiating any hidden fees or purchase costs.
Remain diligent and keep it simple
Diligence is an important quality to have when managing your money. Ensure you pay your bills on time, every time to gain a reputation for trustworthiness and liability, not to mention the potential fines and penalties associated with late payments. While larger businesses may be afforded some good grace on account of their size and proven profitability, small businesses are not afforded that luxury. However, ensuring the will be much easier for a smaller business as your accounts will remain relatively simple compared to the intricate web of debt, assets and cash flow that make up a lot of larger business accounts. Try and maintain this simplicity as long as you can as your business grows in order to ensure your business’ long-term financial stability. Taking on new debt may be needed for growth but try to keep this to a minimum in the short term.
Make your money go as far as possible
There are a number of ways in which businesses can go about minimising expenses. One of the key ways of doing this is to attempt to green your operations in order to minimise utility costs. This has the added benefits of excellent PR points and future-proofing your operations. The wider greening of the economy is an inevitability at this point and those that don’t act as fast as possible will be scrambling to play catch up should policies such as carbon taxes and other penalties come into effect. Other ways of minimizing expenses include following up on any sales calls for office supplies to shop around for a sweetheart deal, buying furniture and other office equipment secondhand and minimizing travel expenses by making use of digital solutions for meetings and other comms.
Outsourcing
All of this can seem very daunting to a start-up or small business owner, especially if you’re just getting off the ground and can’t afford to negotiate hard or make any infrastructural changes. One way to ensure that your money is managed effectively is to outsource an accounting solution. This has the advantages of a dedicated, well-trained team managing your finances, ensuring financial compliance and it gives you the time to focus on what you do best: running your business and developing your product or service. Plus, you can scale their workload to your needs elsewhere in the business! We at minc offer financial and money management services including payroll, bookkeeping, tax, and financial analysis. Find out more here.