Congratulations! You have a business. Whether it’s small or big, a startup or a hundred years old, owning a business is an incredible accomplishment. But hey, everyone understands that managing finances can be a challenge, especially for the younger businesses out there. But not to worry - keep reading for a few tips on how to manage finances when your business is starting out.
Separate Personal & Business Money
It’s easy for young business owners to want to put all their money into their business. All that money can go a long way in helping your business grow, and it may be tempting to put every ounce of cash into it that you possibly can. Don’t fall into this trap. Pay yourself every penny you’re owed, just like you would your employees. This way you’re still getting paid, no matter what kind of financial fluctuations you may encounter with your business.
Plan, Plan, Plan
Where do you want your business to be in 5 years? 10 years? Think about these questions, and budget accordingly. Consider all the finances that your business will need day in and day out (like bank fees, rent, utilities, equipment, and payroll), then consider what finances you’d like to use to help your business grow (advertising, more employees, website costs, and office space/furniture). In addition to planning your goals, take unexpected expenses into account as well by setting funds aside in an FDIC-insured bank account for emergencies.
Maintain Good Credit
As your business grows, you’re bound to encounter expenses that may require loans, such as additional insurance policies or real estate. It’ll much easier to get approval for these transactions when you have good credit, so be sure to handle all payments in a timely manner. Don’t let your company credit cards run a balance for more than a few weeks, and be sure to meet payment deadlines. Bonus tip: don’t be afraid of loans, but only seek them out when you know you can afford them. Don’t take out a loan with interest rates that are not within your budget.
It’s All About That ROI
Do all of your investments pay off for your company? Perhaps they do, or perhaps they don’t. Keep track of which expenses are providing a good return on investment, and which ones may need to be discontinued. Taking note of which expenditures are benefiting your company and which ones are not will give you an idea of what financial habits are best to maintain.
Set Yourself Up for Financial Success
There’s a lot to consider when running your company, but business owners love a challenge, right? The Giovatto Agency does too, and we’ll be sure to take your finances into account when planning your marketing strategy. No matter how young or old your business is, our award-winning team will create a media mix that produces an excellent ROI and sets you up for long term success. Contact the Giovatto Agency for a free consultation, today!