Today’s expertise comes from Connecticut’s own Arciuolo’s Shoes.
When you start your own small business, there are a million different worries that always seem to be at the forefront of your mind. Staffing, building a consumer base, and establishing a brand are all essential elements to creating an effective business, but there’s one element that towers above the rest: money management.
Whether you’re an emerging entrepreneur or a longtime small business owner, properly managing your finances is arguably the most important factor in determining how successful you will be.
Poor money management can capsize even the most established organizations. As a small business owner, I’ve spent years building my company and learning from my financial successes and, perhaps more importantly, my failures.
These companies operate independently of one another and each present their own unique set of challenges.
However, despite their differences, the one perennial commonality is the need for effective money-management strategies.
Below is a list of my top 5 small-business financial techniques that I’ve found to be tremendously useful, and I hope you will too.
Don’t be afraid to check your balances.
I believe that many of us have this sort of irrational fear of checking our bank account or credit card balances. We’re afraid of what that number might be, so we stave off checking it as long as possible, but this is an ineffective strategy.
Get in the habit of routinely checking on your accounts and make sure that you’re aware of upcoming expenses and invoices due. Don’t ever let yourself be caught off guard when it comes to your debits and credits. Your small business will throw enough surprises at you; don’t let your account balances be one of them!
Learn to look past the promotional period.
When you’re first starting out as a small business owner, you’re going to be bombarded with special offers and promotions from vendors, internet and phone providers, the chamber of commerce, and much more.
These initial or “welcome” offers can look really attractive in the short term, but I recommend looking past the initial coupon and focus on which companies offer the best financial terms permanently.
For example, if one vendor offers you 35% off your first order and 30 day payment terms and another vendor offers no initial discount but 90 day payment terms as well as stock balancing options, then, in my opinion, the second vendor is the obvious choice because they’re setting you up for much more flexibility in the long run.
You want to be in business for a very long time, so be sure that you establish professional relationships with companies that want help you in the long haul.
Always look to eliminate waste.
Your business is an ever-evolving organism with needs that are constantly changing. Make sure that you’re up-to-speed with exactly what’s necessary for your company to operate and also what’s unnecessary.
Look for overlapping subscriptions, check to see if you’re paying for services you don’t use.
Constantly check your inventory for stagnant products to push. Pay attention to what your hot-selling products are and find a way to bundle sales with some of your less popular stock.
Make sure you’re not wasting money by have inefficient lighting or leaving the AC on during the weekends.
Take advantage of tax credits wherever you can find them and be sure that your staff team is just as concerned with eliminating waste as you are!
Have a professional check your books routinely.
Not all of us can afford financial advisers or accountants, and it can become very easy to fall into a repetitive rut and let significant financial issues go unchecked.
I believe in having a fresh set of eyes audit your business’ health at least a few times a year if not more often.
You may know more about your company than they do, but managerial and financial accountants are trained to go over your company with a critical eye.
More often than not, you’ll find yourself surprised at what they find! Like I mentioned earlier, you should look to eliminate the possibility of financial surprises by consistently looking for issues, obstacles, or ways you can improve.
Your staff is an investment.
While it may be a bit unusual to see people as investments in your business, I can think of no better way to describe them.
You’re putting time and money into this person in the hopes that they become an invaluable member of your organization. Just like any other investment, you want to make sure that they’re being utilized to their fullest potential.
Pay attention to your employees’ performance and try to determine where his or her strengths may lie.
Employees who feel like they’re making a difference and enjoy their position work harder, generate more income, and even look for ways to save you money.
A business owner is only as good as the people he or she surrounds him or herself with.
Praise and constructive criticism should be commonplace in your organization, and be sure to make your people feel respected. You’d be amazed at what a well-motivated staff can accomplish!
Thanks so much for your wisdom and expertise!