Deb Dey — November 16, 2017 If you want your business to be successful and last a good while, you can’t forget keeping its financial health in check. It is the key to measuring the financial aspect of the company. While, yes, measuring financial health isn’t easy, for small or large businesses, but it is very important.
Getting your finances in order before you take a huge leap is probably a good idea. You can either sit down with a professional or work on it yourself. They’re both fine ways to do it, it’s all about what floats your boat.
Tilman Fertitta, CEO and sole owner of Landry’s Inc., one of the largest restaurant corporations in the US, is probably right when he says, “Don’t ever let your business get ahead of the financial side of your business. Accounting, accounting, accounting. Know your number.” Unless you want your business to not do that great, of course.
I think we can all agree that the single biggest reason that businesses fail to succeed is poor management of money. Here are a couple of steps for you to take if you want to improve the financial health of your businesses before your revenue problems grow to a place of no return.
Know What’s Happening
Before you move on to doing anything for your business’s financial side, know what’s really happening. Make sure you know what revenue is coming in, how much is going out, the debt you’re in etc.
Believe me, you do not want to be in a position where you have no idea where your money is. Even if you’re one who wants to leave the finance side of things to your accountant, you need to know your business’s financial condition at all times if you want to stay out of troubled waters.
Keep the dates in order as well. Always stick to deadlines and verify how long your debtors have to settle the debts as well.
Sticking to your word will obviously add to the reputation of your company, and will allow you to build a stable business.
Analyze your Expenses
Before you head out looking for funding, make sure to reconsider the places you’re spending. Make yourself a priority list and stick to it. Learn to budget. Cut out things that are unnecessary. If you have any larger expenses, don’t forget that you can always get your hands on a periodic payment plan to help you through the way.
You can always earn money with sales, yes, but reducing your spending will help you in the long run.
Before partnering with anyone make sure you are working with the best option you have, whether it be for insurance companies or suppliers for your business. It’s an easy way to save thousands of dollars on top of making better sales.
Marketing Techniques
Right, this one’s an easy way for you to boost your business. With all the advancements being made in the industry, we have much better marketing options than we did even 6 months ago. Don’t stick to the old ways. You’ll have to spend a lot more money to get a result even close to what you desire.
Today, you can easily market your products to a huge audience through the Internet. Use it to your advantage. Yes, it does take effort and patience but you’ll be saving a lot of money and the results are much better. You can take examples from renowned websites like BuzzFeed, Panjiva, and eWorldTrade. These websites not only marketed their products and services through digital marketing but also earned a good amount of business conversions too.
Invoices, Invoices, Invoices
The worst habit you could develop is not keeping invoices. If you don’t have invoices properly organized, you’re going to have a tense relationship with your partners. Without invoices, there’s no way of being sure about any expenses being made. Not only is that going to make it hard for you to keep track of everything, but it will also make your customers doubtful about the legibility of your business.
Learn to keep invoices for the tiniest things. Keep a record of every information when it comes to money. Also, pay attention to making your invoices easy, clear and detailed. Anyone who reads them should be able to understand what’s going on.
Send invoices on time, and always keep copies of them with you as well. And if you really want to take this seriously, it doesn’t hurt to ask them for an acknowledgment.
Invest your money
Before asking for money externally, invest a good amount of your own. But of course, don’t sell all your assets in one go. When you invest your own money and have a record of it, asking for funding is automatically made easier. Most investors or lenders require proof of the amount of equity invested in the business before they invest any of their money into it.
Also, investing your own money will also lessen the pressure for you, as you don’t have to pay anyone back, and motivate you to work harder as well to earn back the money you’ve invested.
You can ask your family and friends as well. Although, keep in mind that sometimes, when businesses don’t do so well, relationships can get affected by it too. But it does give you a better chance of obtaining finances.
Alternative funding
It’s not unusual for businesses to need a little help when it comes to the money. Every business at some point has needed monetary assistance. But I’d say to only approach banks or other options of financial help after you’ve done everything on your own. Starting out with a heavy loan is never a good idea. Most businesses do start pretty slowly, so if you pull a huge loan and it takes longer than expected for your business to stabilize, you’re going to have a lot of problems, and we’re talking courts and cases here.
After your business has some roots, you can think about reaching out to banks for loans or look for expansion grants by the government (not very common but worth a try).
Now, not everyone can get the bank or investors to loan them a few bucks. Crowdfunding is your next option. You can build you crowdfunding strategy, and with the help of the Internet and digital marketing, you can acquire quite a decent amount. There’s no way of knowing how much it’ll work but it is faster, and there’s zero collateral damage in most cases.
Running a business is not easy and definitely not everyone’s cup of tea. But with these tips, you can better your chances of building something you’re proud of. Don’t forget to change your ways with the world, and keep adding to your knowledge if you really are aiming for a successful business.
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