When you’re a small business owner, protecting yourself should be one of your main priorities. Managing your finances effectively is key to your survival, so it’s a good idea to get things off to a solid start.
Small business owners or freelancers can often be taken advantage of when it comes to money. People will often delay their payments or make unreasonable demands – affecting your cash flow and your future growth.
Having a set of rules to guide your business can help ensure that money doesn’t become an issue. Consider the following money rules to set as a small business owner, and secure the future of your business.
Make Time for Your Finances
From the outset, you need to make time for the financial side of your business. Even if accounts aren’t your forte, it’s important that you learn how to manage your accounts and take them seriously. There are a lot of ways you can manage your finances easily, including online accounting apps or even using an accountant who specializes in small business accounts. Whichever option you choose, you need to make sure you have a system in place before you begin operations.
Make time in your schedule to check over your accounts, make payments, send invoices, etc. It will help you keep on track, and stop it from becoming a huge task to deal with at the end of the month.
Choose Payment Terms That Are Right For You
As the owner of your business, you get to decide which payment terms are right for you. You might have an online payment process that makes things more secure, or you could offer a range of payment methods that give flexibility to your customers or clients.
Researching different types of payments can help you find the right one for you. Knowing the difference between ACH and wire transfers is one way to decide how you should accept payments. Don’t let others influence your payments – it’s a decision that needs to be right for you and your circumstances.
Don’t Do Favors For Anyone
When your business is still in its infancy, you could get approached by people you know for favors, such as cheaper rates, delayed payments, etc. However, opening yourself up to this can mean you encounter problems with your finances. If you’re providing products and services, you deserve to be paid for them – regardless of who is asking.
Making sure you get paid is something you need to do to keep your business afloat. Doing a favor for one person may not seem like a big deal, but could it start to spiral? Stick to your guns and be strict about what you’ll do for others.
Have Money Set Aside for Emergencies
The global pandemic has brought everyone some harsh lessons in what can happen if the world was to suddenly shut down. Building up an emergency business fund is something that’s important to help your business prepare for anything. Could you survive if your business was unable to operate for a certain period? Future-proofing your business is important and you should never take anything for granted.
Be Sensible When It Comes To Your Profits
Making a profit through your business is an achievement to be proud of. But it’s important that you’re sensible with the money that your business makes. Building an emergency fund is just one thing you can do to safeguard your business. There are also a lot of other ways you should invest your company’s first profits, including investing in resources and marketing your business.
With a plan of action for how you’ll manage your profits, you’ll develop a level-headed approach to running your business that can stop you from making costly mistakes.
Get Help When You Need It
If things are taking a downturn for your business, it’s important that you seek help as quickly as possible. Burying your head in the sand can lead to worse problems further down the line. Seek help before it gets worse, and make a promise to yourself that you’ll seek support. You could find that there is support out there to help you get your business back on track.
Running a small business is a steep learning curve, and you’ll learn a lot about your finances in particular. Setting yourself some money rules will give you some ground rules for running your business and help you succeed. Get a handle on your finances from the very beginning to give your business the best start.
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