When you are starting your own small business, one of the most important things you need to do, is to keep an eye on your finances, right from the very start. Ensure everything is organised and in order. Making sure you know your numbers and that you avoid the pitfalls, when it comes to business, finance is crucial if you want to make sure your business is a success.

Here are the ins and outs of finance when you are starting your own small business. Take a look and you might realise you forgot something important:

How Much Money Do You Need?

 

Knowing how much money you’re going to need is imperative when starting your own business. Make sure you do the math and take absolutely everything into account. It is always better to estimate a little more than a little less. Take into account every business expense you can think of. If it is a bricks and mortar business there will be rent and rates, utilities, debit card facilities and much more.

If you are operating only online then the expenses list will be much smaller. Most of your costs will be for your website hosting, autoresponders and social media schedulers. However, remember to add in your yearly domain name renewal. I know it’s not much, mine is just $13.99 a year with Wealthy Affiliate but it is an expense all the same.

If you have a source of money, all of the things you need to be able to run your online business should be paid yearly if possible. There is always a huge discount if you do this. Remember you want to keep your expenses as low as possible, but not so low that you cannot run your business effectively.

How Will You Source The Money You Need?

Not everybody has enough money saved to start a business, and unfortunately, they don’t usually have a rich relative they can go to either. So how will you source the money you need? You have plenty of options, depending on how much you need and your current financial circumstances. Business credit cards are a good idea, as you can spend on these and all of your business spending will be in one place which will help with your accounting and expenses. However, you need to make sure you are paying them back on time. You do not want to pay any more interest than is necessary.

You could also look into how to get a loan with bad credit if yours isn’t in the best shape, but there may be more suitable options. Peer to peer lending and angel investing are other things you can think about.

 

Creating A Plan For Your Cash

Creating a plan for your cash will help you to secure the money you need, as the potential investors will see you have everything worked out and then they will put their trust in you. They want to know that you are a trustworthy person and that the money will be put to good use. They also want to see that you know your numbers!

Sticking To A Strict Budget

Once you’ve got the cash, you need to make sure you stick to a strict budget and that the cash is used wisely. Become frugal, even if you’ve secured a sizeable amount of money or you already have it. Making sure you do this at the beginning is so important, as even if your business is going well, things can easily slow down and leave you out of pocket. Always look for ways to save – just be sure you are also willing to spend, where it matters.

Keeping Records

 

Keeping records of everything you earn and spend is essential, right from the beginning. This keeps your business legitimate and stops you from being hit with a heavy fine when it comes to paying your taxes.

Get yourself an income and expenditure book and make sure you write down your daily expenses and your income. If you do this, you will have a really good idea on what you have to spend on your business and when you need to make some cutbacks.

Make sure you keep every receipt and put them in a file. You may need to print these receipts especially if you work online. The cost of a printer and the ink is a legitimate business cost which will help with those taxes.

Don’t forget travel if that is required to run your business and you can also include a portion of your household expenses if you use your home as an office.

Hiring An Accountant

An accountant may or may not be worth the expense, depending on your business and it’s size. I have only ever used one once as my corporate training business was set up as a limited company. With that business set up, you are required by law to have your accounts signed off by an accountant.

As a small business or as an individual, you can submit your own tax returns but you mustn’t forget to do so !

Final Thoughts

The finance side of running any business can be quite tedious unless you are a big fan of numbers which I definitely am not. However, doing them on a weekly or at least monthly basis will mean you will not get to the end of the year with a big job to do and no idea of whether you are in profit or not!

I hope you have found this post useful. If you have please give it a share on your favourite social media platform.

As ever if you have any questions or just want to share your own thoughts or tips, leave me a comment below and I will get back to you as soon as I can.

With Grace and Gratitude

Karen