Money makes the world go round, or so the saying goes, and it will make sure your business continues to function as well. The more money you bring in, the more you will be able to spend on improving your business, and in so doing, your business should grow.
Of course, you don’t need us to remind you of that fact. As a business owner, money will always be at the forefront of your mind. And for all we know, you might be managing your finances well and experiencing success because of it. Here’s hoping!
But just in case your finances aren’t as they should be, here are some of the key habits you should stick with to ensure greater chances of financial success in your business.
#1: Check your bank balance regularly
Sure, you could wait until the end of the month for your appointment with your accountant or bookkeeper. But what if you have been unfairly charged for something? What if an invoice wasn’t paid on the day you expected? What if the expenditure is larger than what is due to come into your account? If there are any issues with your business account, you could face financial difficulties, so make sure you regularly check your account. This way, you will be able to rectify any issues before bigger problems arise.
#2: Pay more than the minimum on your business loan
A business loan is a great way to give your company a kickstart when you need the money, but you will be faced with interest charges. To rid yourself of these, and of the loan in its entirety, pay off more than the minimum each month. Of course, you might convince yourself that you don’t have the extra cash to do so. But if you can make savings across your business (more in a moment) and stop any needless spending, you will have the extra money to pay off your loan quicker. With the loan paid off, you will have more freedom to spend extra on your business.
#3: Get into green habits
Save on your energy bills by turning lights off in rooms that aren’t in use, and do the same with any appliances you aren’t using.
Instead of throwing away any items you don’t need, sell them instead. You could sell your old computers to those companies who refurbish them, for example, and you could list office items on business classified sites.
And use less packaging when shipping items to your customers, as you will then have more leftover for future shipments. By taking these steps, you will increase your eco-credentials, protect the environment, and save money in your business.
#4: Start buying in bulk
When spending money on business essentials, buy in bulk when it makes sense to do so. Be it work phones from a wholesale electronics supplier or office items from a stationer, benefit from the discounts you should receive by purchasing more. You will have less need to travel to and from your suppliers too, so you will also save on fuel when you bulk buy.
So, think about those items you regularly need, or those items that will one day be crucial to your business, and speak to your regular suppliers.
#5: Put money into an emergency fund
As a business owner, you need two saving funds. The first should be a fund that accommodates your business goals. You might want to buy new equipment, for example, to stay relevant in the marketplace. Or you might want to move into bigger premises in the future. The money you save will give you the ability to do both.
You should also have an emergency fund. This will come in handy should your business make less money than it should do one month. And it will come in handy if a disaster happens, such as a legal claim from an angry customer, an equipment malfunction, or damage to your premises. With an emergency fund in place, you won’t need to dip into your regular savings when disaster strikes, and you won’t need to take out a bank loan either.
For more, check out this recent article by Forbes on building up your business’ emergency fund.
When it comes to creating habits in your business, good habits are always better than bad ones. So, consider our suggestions and follow them to give you greater control over your finances. You should then have the opportunity to save money, pay off any debts, and do whatever is needed to grow your business.