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