Running a financially savvy business is one of the smartest things you can do as a business owner. Understanding what’s coming in and what’s going out can be the difference between success and failure. And since money doesn’t discriminate, it doesn’t matter if your business is large or small, being sensible with your finances is never be a bad idea.
Here’s are a few things you need to know about running a financially savvy business
don’t allow your ego to make decisions for you
The first thing you need to do is detach from your ego. You’ve worked hard to make your business a success. There’s money coming in and you’re excited. Why not treat yourself, right? Wrong!
You want to make sure that you’re reinvesting in the business and that you have a business emergency fund for unexpected expenses. When you’re an entrepreneur, no two days are the same. Being smart with how you spend profits is important to your overall financial health. Purchasing things that you really don’t need, or aren’t yet prepared to financially sustain may feed your ego, but it can also be detrimental to your business.
get clear on how you’re spending your profits
Having a clear understanding of how your profits will be allocated, will help prevent the mishandling of funds needed for more important purchases. Thinking ahead allows you to plan for the things you’ll need to take your business to the next level.
In the first few years of business, you may find that reinvesting your profits means future growth and sustainability – both of which you want!
For example, if you’re an online clothing boutique, your goal may be to start offering higher-end pieces. This could mean spending more on the front end. And while it may be an upfront expense, you’ll gain it back in future profits. Or, if your business is primarily online/digital and you know that you need a heightened level of online security, you may need to set aside funds to have a consult with a knowledgeable tech company like Mustard IT.
the little things can make a big difference
It may not seem like it, but small changes can have a big impact on your bottom line. Look for ways to save on… everything!
For example: if you offer a product, look for ways to simplify your packaging or negotiate your shipping costs. If you use machinery or equipment for your business, look for second hand equipment before buying brand new. Buy office supplies in bulk. Before hiring a new employee, consider outsourcing specific tasks or projects.
being a conscious entrepreneur can be a win-win
Being more environmentally friendly helps attract a different market to your business but it can also help you to save money – especially in the long run. Eco-friendly businesses are rising in popularity, but that’s not the only reason to start being a conscious entrepreneur. By simply changing light bulbs, reducing paper (or going completely paperless), implementing a recycling program and working with other environmentally conscious companies, you may be able to save money and gain favor with an untapped market segment.