All too often we find ourselves with big dreams of owning our own business without the capital to match. This is by far the most difficult part of building a business from the ground up. Small business owners need to be sure that they are saving enough money to act as an umbrella on a rainy days but they also to need to be sure they have enough funds to purchase materials, advertising, necessary software programs, hire human resources, etc. Needless to say, there is hardly ever enough money to go around at the beginning stages of developing a small business. Here are a few tips that can help.
Credit is important! That can not be said enough. Maintaining and keeping track of your credit score is essential to the growth of your business. If maintained properly, your credit can help you secure future business and investments.
How is your business going to survive if you don’t have systems in place that allow you to track and monitor the cash flow? You need to be aware of the financial condition of your business at all times and have the ability to identify any possible issues or risks. In order properly manage your cash-flow, you need to be able to:
- Manage receivable accounts
- Manage payable accounts
- Have a crisis management plan prepared
- Have a financial emergency plan prepared
Be sure to keep accurate records by tracking and monitor all the above mentioned.
Your balance sheet is a clear and simple way of reflecting the financial security of your business. Your balance sheet should include:
- Available assets and liabilities
- An acceptable amount of capital to increase assets and reduce liabilities
Many small business owners update their balance sheets daily in the early stages of their business and move to updating it weekly once the business is established.