Running a business is no easy feat, and there are plenty of things to keep track of and consider.
From managing your inventory to creating new products, to managing your finances. Funding your business and running the financial side of things can be tough, especially as a beginner. Whether you’re starting up or you’re in a business for a long time, learning how to make smart financial decisions is important.
New business owners have their own set of hurdles and difficulties they need to overcome.
If you’re planning on starting a business or struggling to run it financially and are in need of some help, you’ve come to the right place! Here’s everything you need to know about starting your business up right from the get-go! Take these 6 financial tips into consideration when starting your business, and you can’t go wrong!
Set some financial goals
The best way to set your start-up up for success is to set some financial goals for it.
Before you start tackling tangible problems, sit down and create a solid plan of action first. Setting financial goals starts with setting a goal for your desired amount of income. Whatever that number may be will dictate your bill rate, the business purchases you make, and the type of clients you target.
Setting your financial goals and targets early on will make your decision-making process much easier.
You’ll be able to navigate your options based on whether or not they serve your ultimate goal. You’ll be able to make better, and smarter financial decisions while wasting less time and resources in the process. Every good business starts with a solid plan!
Make use of SME loans
When starting up a business, founders will often have to take out loans to generate some start-up capital.
Loans are a great way to help get your business off the ground, but it’s important to get the right loan for your company. If you haven’t heard of them, SME loans are loans made specifically for smaller and medium enterprises. They help get smaller startups off the ground and hold their own against bigger, more powerful enterprises.
From debt crowdfunding to government-backed startup loans, there are plenty of options out there. As a smaller business, you can’t afford to take out a loan that will do you more harm than good. Make use of SME loans to help you find your footing as a new business.
As a business, you’ll have a different experience with taxes than if you weren’t an independent contractor. Many start-ups fail because they don’t factor in how much they need to pay in taxes. As a business, for taxes, you should plan on playing at least 30-35% of your gross income for starters.
If you’re not familiar with paying taxes as a business or independent contractor, you can always ask for help. Talk to a tax expert early on and get your taxes situation under control. If you want to stay on the safe side of the law, you have to learn to do your taxes correctly and on time. Failing to do so can cost you your business, income, and reputation.
Build good business credit
Like with all forms of credit, having good credit can open up doors and opportunities for you. As a business, building and maintaining good credit in the beginning stages of your brand is crucial. If you want to apply for a loan or grant down the line to expand your business, you need to have good credit.
Having good credit gives you access to exclusive perks like better loan terms, insurance premiums, and credit lines. By maintaining good relationships with creditors and not biting off more than you can chew, you can create good credit for your business. Make an effort to establish yourself as a trustworthy business with good credit, and you can’t go wrong.
Budget for growth
Another smart decision you can make as a potential business owner is to budget for growth early on. At the end of each month, you need to be setting aside some cash for potential growth options in the future. Should the opportunity arise, you need to be ready to financially support your decision to expand.
Having a designated budget for your business is important, but budgeting for growth is even more so.
You also need to make investing in growth a priority for your business, especially as a start-up. Whether this means higher wages for existing staff or hiring more staff altogether. Whether it means purchasing a new storefront or building your website, investing in ingrowth is important.
Factor in time for rest
As important as maintaining a fixed budget and working overtime to run your business, you need to factor in time for rest. Overworking yourself and your employees could spell disaster for your business that could be avoided. It could lead to mistakes, mishaps, and errors that can cost you down the line.
Fatigue, exhaustion, and burnout can statistically cost a business more than having a paid vacation now and then. Rather than risk it, take the necessary time you need to rest and regenerate. Factor in time to rest for you and your employees because taking time off is a matter of planning ahead. Remember to let your clients know when there will be fewer workers available and how they can contact you.
So there you have it! With this guide in mind, you’re ready to start your business off right financially!
To make smarter financial decisions from the get-go, you have to set some financial goals and create a plan. Make use of the right loans for your start-up that will best benefit you as a small or medium enterprise.
Get well-acquainted with your taxes and learn how to do them well and on time.
Make an effort to build good business credit from the start to open more doors and opportunities in the future.
When running your business, always remember to budget and plan for growth. Last but not least, remember to factor in some downtime to rest. Your business can’t run on fumes, so make sure to take some time from time to time to decompress. Keep these tips and tricks in mind and you’re sure to start your business off on the right foot in no time!