So, you have started your own business, just like you always wanted. Congratulations on taking that huge step, and making your dream a reality. No matter how much you may know now, you will soon discover that experience is the ultimate teacher, and mistakes will probably be made. It is all par for the course. But, there is a lot you can do to ensure a bit of a smoother ride, such as learning all you can about making smart financial decisions early on.
Here are just a few important points to keep in mind:
Throwing a Lot of Money at Your Business Won’t Ensure Quicker Success
While it certainly takes some money to make money, throwing a lot of random investments at your business won’t ensure it will grow more quickly, or become successful at a faster rate. Some things just need to grow organically, and with effort on your part. Growing too quickly can also be detrimental in many ways. Ironing out the kinks and making improvements on various fronts will probably be necessary in the early stages, and you don’t want things like this happening when you have loads of business because there is the potential for a larger number of dissatisfied customers, and this can really hurt your business.
Think Before Spending
Before you spend money on something, think if you really need it right now. Don’t rent that office space if working at home is sufficient for now; don’t take on the expense of employees if freelancers or outsourcers can get the job done just fine. You want a nice website, but it might not be necessary at this moment to spend thousands of dollars getting the ‘perfect’ one. Unless your business really needs something at this very moment, hold off on buying it.
Keep On Top of Your Accounting
Keeping on top of payables and receivables is one of the most crucial aspects of running your business well, and successfully managing your cash flow. But, as important as it is, surprisingly many businesses, both old and new, drop the ball. Establishing good habits now will be highly beneficial for you not just in the immediate future, but down the line as well. Look into purchase to pay automation software to successfully manage accounts payable—these programs will streamline your payables process, from formulating a purchase order to document storage.
Don’t get lax with your receivables—develop a set process for dealing with late invoices, and apply it each and every time. Invest in good software that allows you to easily track each invoice from creation to payment.
Get Help When You Need It
This tip may seem a bit obvious, but for a number of reasons, new business owners don’t heed this important piece of advice. Perhaps your ego gets in the way of admitting something is above your head; perhaps you are trying to save money, and are reluctant to take on another expense. But, nothing is more important to your business than managing your finances properly and competently, and getting professional assistance is a worthwhile expense that will ultimately improve your bottom line.
If you commit to following these four tips, you will have laid a strong foundation for a financially sound, successful business.
Featured image credit: concept for brainstorming and inspiration/ShutterStock
