Manage Your Business Finances Before It’s Too Late

Are you managing your business finances or are they managing you?

A leading cause of small business failures is a lack of money. Many businesses will run out of money before getting a chance to really test out their product or service in the market. It’s easy enough to conclude that if you run out of money and cannot afford the tools and advertising you need to build your business that you are not going to get very far.
 
So how do you avoid the pitfall of letting your business finances run you out of business?
 
There are 2 main areas I’d like to focus on, that if given the proper attention, should help keep your business financially afloat and lead you to success.
 

Budgeting

It’s not always easy to create a budget for a new business. However, if you get too far along without properly budgeting your expenses you could quickly run out of money and be out of business before you know it.  In the simplest terms, a budget is a spending plan. To make sure your business gets past it’s infancy and moves towards long-term success. money going out must be less than money coming in. Some of you may have money available to spend even if you have no income. That may work out for a little while but can’t go on forever.  Here are a few simple budgeting tips that will help…
 
  1. Plan to spend what you can afford even with little or no income
  2. Put your budget in writing
  3. Track your actual results against your budget
  4. Adjust your budget if your situation changes

Business Spending

It is irresponsible to expect to launch a business without spending any money. With that being said, we are fortunate to be in this age where so many tools and resources are available online for little or no cost. When it comes to running a business there are a few major outlays you can expect in most cases. First is the actual startup cost of the business you are running. Second is the cost of tools and other operating costs you need to run your business. Third is the cost of marketing and advertising. Let’s briefly examine each of these items…
 
  • Startup costs. Depending on the business you want to operate, there may be fixed costs that you cannot avoid. Therefore, you must plan for these costs as the top item in your budget. Examples might be the upfront cost of a computer, software,  or licensing. 
  • Operating costs. In addition to things like internet, utilities, cell phone, etc., there may also be monthly costs that are unavoidable. So many services that we use as business owners are now charged as monthly subscriptions. You need to be aware of these as you begin your business so you can plan for the monthly outlays. 
  • Marketing and Advertising. It’s difficult to run a business and attract customers without advertising. Thank goodness, there are so many ways you can promote your business online for free. The absolute most effective way to do this is through Social Media Marketing. Things like Facebook, Twitter, and LinkedIn are all free resources you can use. These methods can be time consuming and must be used properly, but can bring you amazing results. 3 tools I highly recommend to help with your marketing efforts are a blog, social media manager, and an email marketing program. There are many free options that you can use, at least in the beginning when money coming into your business may be a scarce resource. You might make some sacrifices with free options, but there are still some excellent choices. For a blog, I recommend WordPress, Post Planner for a social media management tool, and for email marketing I recommend SendPulseOnce you begin to make some money you can invest in upgraded tools and paid advertising which will free up some of your time and make things a bit easier.

You may be feeling the financial crunch in your business as you are reading this article. Or, maybe it hasn’t hit you yet.  In any case, it’s time to start treating the finances of your business with the respect they deserve. Proper budgeting, tracking of results and some financial discipline will definitely help get you off to a great start and keep you on track to long-term financial success in your business.

To Your Success,

Bob Swetz

P.S. If you would like to dig deeper into this topic you have a few options:

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  • Find me on social media by using the icons at the top of this page
  • Set up a 15 minute video call by using this link https://bobswetz.link/meeting15

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