For more than 62 percent of Americans, owning and running a small business is more than just a dream—it’s a life goal. While getting your company off the ground can be tough, keeping it profitable and growing is often more financial challenging.
You need to manage things well and stay on top of your company’s finances at all times.
If you’re not sure where to start, you’re not alone. Running a business can be confusing. Keep these small business financial tips in mind when you start and you’ll be in good shape and able to keep your company growing on track.
1. Separate Business and Personal Finances
The most important thing to keep in mind when figuring out how to run finances in a small business is that your business finances should always be their own thing. Open a dedicated business bank account and use it for all business-related expenses, payments, and deposits.
If you have the ability to pay yourself, cut your paychecks from that business account and deposit them in your personal checking account. You should also keep track of each pay stub you generate. If you’re not sure what to include, use check stub templates to guide you.
This will make filing taxes easier each year and reduces your risk of getting audited by the IRS.
2. Monitor Your Cash Flow Often
One of the hardest parts of owning a business is making sure you’re able to cover your bills and make the necessary payments every week. This means you need to keep an eye on your cash flow every month.
Monitor how much money you’re bringing in, how much you’re spending, and look for ways to improve your cash on hand whenever you can. The more closely you monitor your cash flow, the better prepared you’ll be to deal with the ups and downs of your business.
3. Don’t Be Afraid to Take Out a Loan
Though many business owners stay away from debt when they can, it’s not always feasible. If you find yourself in need of extra money to finance growth or to invest in your business, don’t panic.
Start looking for loans.
Speak with your preferred bank or credit union and let them know what you’re looking for. They’ll be able to make recommendations on the best loans for your business. Just make sure to compare quotes from several lenders.
Otherwise, you risk ending up with a smaller loan than you need at an overly high-interest rate.
Follow These Small Business Financial Tips
Keep these small business financial tips in mind and you’ll be able to keep your company afloat and profitable more easily. Just remember that small business finance is dynamic.
You may need to change your strategies to suit your company’s current needs every few months.
Figuring out how to finance a small business so you can focus on growing the brand can be tough. Check out our latest posts for more inspiration and advice.