Building a business that is sustainable for the long term is the goal of most entrepreneurs and business owners. The dream of freedom, an incomes that grows, and products that change the world is what keeps many business owners going. In the pursuit of chasing dreams, it can be easy to get ahead of yourself. Keeping track of and managing your money is something that can quickly be all consuming and overwhelming. In order to help, we have Part 1 in a money series that will quickly get you back on track mentally. Therefore, we have 5 money tips to know before starting a business. You can also implement these at anytime during the business building journey.
5 Money Tips To Know Before Starting A Business
1. Keep Customers Buying
When your business model is a one-shot deal, given the cost of advertising, one-time customers aren’t usually enough to justify the expense. While there are exceptions to this rule, keeping your customers buying is essential. If you have the opportunity to produce multiple transactions over the entire lifetime of the customer, that will keep your cash flow consistent. With that said, make sure that you are targeting the right audience, solving their problems, and creating products that are in line with your vision.
2. Payroll Management
Managing your payroll to be able to pay your employees is an essential part of running a business. We have mentioned this before, but Gusto is our go-to resource for payroll management. It can keep you organized and on top of everything you need to ensure that you are taking care of your teams and employees. Gusto can do so much for small businesses, and we would highly recommend considering this for your business. You can read this post and this post that we have recently done, that shares more details about Gusto and all that it can do for you.
3. Track And Monitor All Spending
Establishing internal financial protocols to track and monitor all spending is something small businesses should start doing right away. When you dedicate time to review and update financial information, it can go a long way in protecting the financial health of your business. When you stay on top of this, it will also help your business mitigate fraud or risk. Small businesses are often strapped for time, money, and sometimes resources. But, this shouldn’t prevent small businesses owners from implementing some sort of internal control. It will help set your business up for success and also, set up your employees for success when money is involved.
4. Limit Your Fixed Expenses In The Beginning
Fixed expenses are the regular, expected expenses each month that will keep your business running. Fixed expenses are predictable and usually set to the same total each month. However, just because they’re fixed doesn’t mean they are permanent. You most likely have some areas of high fixed costs that can be reduced, negotiated, or even eliminated if possible. Being aware of all the expenses you are incurring right from the get-go can be helpful. The last thing you want to do is get in over your head.
5. Focus On Expenditures But Also ROI
Measuring expenditures and return on investment can give you a clear picture of what investments make sense and which may not be worth continuing. Small business owners should also be aware of where they spend their money. Focusing on ROI that comes with each expense is important. Not doing this could mean that you are losing money on irrelevant or bad spending bets. When you know where you’re spending your hard-earned dollars, you will be able to easily see where your investments are paying off. If it isn’t paying off, cut back and spend a bit more on the initiatives that do work for you and your business.
Although finances are a necessary part of running a business, managing them isn’t always a strong point for business owners. If accounting, bookkeeping and managing finances are not your cup of tea, we can help you! Instead of procrastinating or spending too much time worrying over it, you can allow us to help point you in the right direction. We are more than just bookkeepers and we can help you move towards your goals, financial and beyond. Set up a FREE Discovery Review Session today and allow us to show you what’s possible.
Stay tuned for Part 2 in this series, coming soon!