If you are the CEO of a start-up, you’re aware that the secret to business success is not necessarily determined by the volume of trade, but vitally your money management skills.
It’s why you should pay close attention to these hassle-free techniques to get a better grip on the financial flow or the income-expenditure pattern of your business.
Here are top financial management techniques every small business owner must learn and perfect to in order to grow.
Create a budget
If you could create a viable business strategy before floating your enterprise, then you should be able to create a practical and workable budget the startup. A good budget strategy will serve as a useful guideline to fix any holes in your cash management system.
Set up a savings fund
The business terrain could sometimes be unpredictable like the weather. So, a savings funds helps you prepare fro the rainy day.
This is not an easy call for startups as, unlike big and established firms, small businesses are always in desperate need of cash flow and always have a strong urge to mop up all available money right now.
But falling into that trap could leave a small business owner and his enterprise vulnerable as nay downturn in the market could lead to a crash of the business with no reserve fund to work with.
Hire an accountant
An accountant or a Chief Financial Officer is trained to help you properly and expertly manage your finances. They can take on the difficult task of tracking your business cash flow and quickly alert you on any loophole that needs to be immediately plugged or area that needs special attention.
Strategise on ways to remain fluid
Money management techniques are not simply about keeping cash. It also requires that you formulate feasible strategies to boost cash inflow and minimise outflow; as well as get adequate cover during business downtimes.
There are several ways to improve cash flow for your business health, such as giving discount incentives to customers or setting up a rewards programme to incentivize customers to pay on time.
Another way is to secure a good, low interest loan for when business is slow or is in urgent need of an extra cash boost to seize a business opportunity.
Keep personal and business finances apart
You must make a distinct difference between your business and personal life and separate the finances. As a general rule, make sure to use income you generate from your business to maintain and grow it.
Don’t splurge on real estate yet
You probably didn’t know that Google and many other successful businesses today began in some awkward locations — not in fancy business complex they all operate from today. So, don’t sink in money to rent an expensive office location which will not directly benefit your business. Let it grow and expand organically first before deciding on spending on real estate.