Good money management makes the world go around
No-one’s in business for the good of their health. It’s about money; making sure you have enough to sustain the business and support the lifestyle you aspire to. So what’s the best way to do that? We offer ten top money management tips.
1. Talk to an expert. You might be the world’s best widget-maker, but without a sound financial footing your widget business is likely to fail. Accountants are superb sources of advice, as well as being better than you at number crunching. Find one you can trust by asking business people you respect.
2. Understand cash flow. Overstretching your business financially will cause problems. If you need credit, consider alternatives like crowd funding. Be cautious about holding too much stock; it’s just ‘dead’ money.
3. Be cautious. An ill-judged ‘throw of the dice’ might bring fantastic rewards – but could equally spell expensive disaster. More business needing more employees? Maybe – but if it’s not regular, long-term work, better to employ contractors or freelancers to share the short-term load. That way, you have no cost burden to carry later.
4. Control expenses. You must know what you spend, so expense management is vital. For firms with just a handful of employees an expense manager app such as free-to-download Solo Expenses makes the task easy, if you’re disciplined about recording spending. Do it on the keypad or by photographing receipts, and filing the item in the right category. Lots are already set up in this money manager app, but you can add others. Invest a few pounds a month and you can add extra features such as firing off reports direct to the accountant, helping them to help you. What’s more, you can check on your spending at any time – accountancy should be part of your day-to-day routine.
5. Know your goals. Build them into an achievable business plan to keep you on track to reach them. But be prepared for change; every decision will make a difference, and must be factored into your planning.
6. Identify your best half-dozen customers. Treat them well. Anticipate their needs, and respond accordingly. Build alliances that make you their supplier of choice, and you’ll find they become a platform from which to broaden a client base.
7. Do what you’re good at. Make widgets. Doing your own accounts won’t generate revenue, and a pro will make a better job of it than you – unless you’re an accountant. Concentrate on the reason you went into business. (but be an expense manager too!)
8. Think strategically. Might seem high-flying for a small firm, but being bogged down in detail will hide the bigger picture you’ve painted in item #5. Make time for strategy.
9. Be a people person. Every employee deserves to be more than a machine for making money. Share your vision; make them feel part of it, and want to achieve it with you. It’s in their interests, after all!
10. Keep going. Be brave enough to try. It’s within all of us to be more than ‘ordinary’. We just need to believe it, and manage our money on the way.