If you run a non-profit organization or do not plan to make any money from your business, this article is not for you.
However, if you are a small business owner who doesn’t have the luxury of an expensive accounting department yet wants to make sure that your business yields profits that make you feel that your efforts were not in vain, you should read this article till the very end.
You’ll be seeing the top four money tips for small business owners and how to keep your small business from bankruptcy.
1. Track Your Finances (Not just your revenue)
As a business owner who is trying to achieve growth, you need to track both revenue and expenditure. I know tracking revenue is popular but why do you need to track your expenditure too? Revenue is the money that comes into your business while expenditure is money that goes out.
Well, do you know what happens when you are diligently putting water into a broken bucket? That’s right! Tracking your expenditure helps you to see whether your money is being spent on what your business really needs. Besides, you need to know your revenue and expenditure to determine whether you are making profits or not.
2. You are a key-member of the business so you need to get paid
If you had a very smart employee who brings in ideas for your business, always shows up at work and makes everybody on your team excited about putting their best in. Would it be okay to not pay such a person at the end of the month? I’m hoping you didn’t say yes because if you did, I don’t think you’ll be left with anybody on your team. As a small business owner, it’s easy to want to put all the money back in. I mean… Who doesn’t want their business to grow?
However, you are a valuable team player.
You must be appreciated!
Even if you don’t get a huge salary yet, it’s important that you pay yourself. The job is done better and you are more grateful for it.
3. Debts Are Not Bad Until You Can’t Pay Back
Have you been tempted to put off paying a debt you knew you could pay at the moment? It doesn’t make you smart. Considering interest rates, your loan is most likely going to increase with time. And even if it’s a no-interest loan from a friend or family, you still need to pay back on time if you’ll maintain good faith which is very important.
Here’s what you can do to avoid getting into bad debt:
1. Only borrow if you have a clear fool-proof plan for paying back.
2. Break down payment timeframe into achievable milestones.
3. Don’t… I repeat, don’t ever think it’s okay to take loans without paying back.
4. Invest In Learning About Financial Management
Have you ever heard this saying: “If it’s not worth your money, it probably isn’t worth anything to you.” I didn’t think you would have because… I came up with it while writing this.
But you know it’s true right? You can read helpful blog posts like this and get a tip here and another there but… If you are really interested in building your business, you should invest in learning about key areas of business such as finances. You can buy useful books and courses on these different areas.
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