By Jennifer Scott
Jennifer works as an online editor at Best Australian Writers and is a business developer that works in different areas of education, technology, security and various types of online marketing. Prior to business developing, Jennifer was a consultant at Deloitte, and managed security services provider and was a developer of a wide range of security solutions.
Learn more about Jennifer's advice on the 7 Essential Financial Habits Every Small Business Owner Needs to Have!
Budgets, Bills and Balance
The three ‘B’s’ of the modern-day small business that seems to run every single aspect of everything. Well, you know what they say, money makes the world go around, and it truly does.
As a small business owner, it’s important that you have the ability to manage and control your own finances. Otherwise, it could have dire consequences for you, and the business that you’re trying to run. But, with around 90% of all small businesses failing, it’s safe to say that there’s definitely some room for improvement. Today, we’re going to explore seven key financial habits that every small business owners should know and follow, helping you manage your money to help you contribute to your own success.
Check Over Your Figures Regularly
It’s impossible to keep up with your finances to ensure that they are accurate without physically checking your finances. As a small business owner, it’s important that you get into the habit of checking on your bank balance and your bank statements. This is so you can be aware of what you’re spending, what’s going where and how much money you’ve got coming in.
Work to a Budget
An extremely important habit you must have, or develop quickly, is the ability to create a stick to a budget. A budget is a long-time financial plan where you’ll have the ability to plan and track your spending while aiming for a goal on where you want to be by a set amount of time. Developing this habit as early as possible means you’ll be able to enjoy the maximum amount of benefits.
Aim to Clear Debt
Many small business owners are in debt, from either previous commitments or start-up costs and you need to make sure it’s your priority to clear these debts. “Since you’ll probably have debt with a bank, it’s important to realise that you’ll be paying interest on that money which is money you could be using to expand your business,” shares Daniel Mason, a financial manager for Best British Essays.
Save for Your Taxes
Depending on where you are in the world, taxes mainly come around twice a year and it can be a difficult time for a business that hasn’t saved money to pay it. In most cases, this will mean that you’ll have to take out a loan or credit card in which to pay, which is only going to ruin your finances further.
Writing a Business Plan
By writing a business plan, you can see exactly what your business is going to be aiming for over the next week, month, year, 5-years and ten years, possibly even further. By laying out these goals in a comprehensive business plan, you can help yourself to create your budget accurately. The more control you have over your finances, the better off you’ll be day to day. For tips and advice on how to write a comprehensive business plan, there is a wealth of tools at your disposal to help you write, edit and proofread your plan. To get you started, you could use Grammarix, Top Canadian Writers, Academadvisor, Easy Word Count, Via Writing.
Be Proactive in Cutting Expenses
As a small business, your expenses can range quite dramatically, and this will cause a huge amount of problems for your finances.
Mark McDonald, a financial manager from Best Australian Writers, states “regularly check your bank statements to make sure that you’re not spending money on subscriptions or supplies that you no longer need nor want. Manage every cent, and you can be sure that you won’t fall into avoidable financial difficulties”.
Pay a Salary
It’s tempting as a small business owner to fall into the trap of paying yourself a varying wage every single month. Some months you might have expenses you’ll need to pay in your personal life, so you might pay yourself some more. However, this is a habit that gets out of control quickly and is best avoided at all costs. Pay yourself a salary wage and stick to it for the best finances.