Five Absolute Musts for Managing the Finances of Your New Businesses
When you finally decide to go out on your own and start a business, you’re probably doing something that makes you passionate. You love what you do and you’re good at it. Managing the finances for a new business is probably low on the priority list, but it’s something you have to think about right from the start, if you want to keep the company - and yourself - afloat.
So, if you’re just starting a company from scratch or just starting to get serious about managing the finances for your new business, we’ve put together a cheat sheet with the absolute musts that can help you make sure you’re starting with your best foot forward.
1. Start a Spreadsheet for Your Expenses and Your Sales
If your business just started as a side hustle, you might not be keeping the most detailed record of your sales and your expenses. But, if you’re spending thousand if dollars on social media or your website and only pulled in $10 in sales in the past year, a spreadsheet can help show you exactly what’s happening.
There are templates out there that can help you get started with everything from your budget to taxes, expenses, and cashflow. For example, SmartSheet provides free business finances templates for Excel (Google Sheets can work, too) to help with managing new business finances.
2. Don’t Forget to Pay Yourself
When you’re trying to save money, there’s the old saying that, before any other expenses, make sure that you pay yourself by investing in your savings account.
The same goes for business owners - if you’re only investing in the business, you’re not investing in yourself. Don’t forget to account for your own income in your expenses, especially if you’re putting most of your cash flow right back into the business.
There’s a big emphasis on bootstrapping, sure, but you don’t want to be bootstrapping so much that you’re left with just the boots on your feet!
3. Make Sure You’re Actually Getting Paid, Too
Paying yourself is great - but it’s only possible if your business is getting paid in the first place. If you’re like most business owners trying to manage their finances, you’ve got a client or two who might not pay on time. If you have multiple sites or products, you also might not be keeping close track of how all those sales and billing cycles add up.
You might write down the estimated cash flow from a new sale, but don’t forget to mark it as an estimate when you’re doing financial management. The biggest mistake you can make is thinking that someone paid you when they actually didn’t. Make sure you have a great billing strategy or a tech solution that can automate things on the back-end.
4. Run Regular Self-Audits
Are your Instagram Ads really driving sales? Do you really need a second warehouse? Are you still signed up for a flashy web service that you don’t use anymore, or maybe never even used in the first place?
Recurring expenses add up, so make sure that you’re using everything that’s still part of your expense sheet. Advertising, especially, should constantly be analyzed. Make sure that you’re getting a higher return on investment than the money you put into all your ads and marketing. Otherwise, all those expenses can add up to nothing.
5. Find the Right Business Card
Businesses require a lot of capital and when it comes to managing your business finances, you want a credit card that works for you, not the other way around. If you’re just starting out, make sure you find a low or no-interest introductory rate. Cash back cards can be great, too, especially if you find that you’re making a lot of purchases on behalf of the business.
A good business card helps you build better business credit, too, which enables you to get better loans and equity funding.
That’s why the experts of CompareCredit have picked their favorite business cards for you. Take the stress of comparing cards, benefits and offers out of the equation so you can quickly get set up with a great offer and can continue doing what you love to do.
Business Finances Start with You
You already did the hardest part: you decided to start your business. Now that it’s up and running, don’t forget to keep track of all that progress with your business finances. Look for spreadsheet templates and apps that can keep track of those expenses and your cashflow as your business keeps growing and, soon, you’ll be able to hire someone who can do it all for you.