By Lilach Bullock
Being a small business owner presents its own unique set of challenges, and one of the main ones is not having the budget to do all you need to do. A successful business needs constant investing to keep it growing—more marketing spends, product or service improvement, getting more people to join the team, and so on.
If you are careful with your finances, invest only in what matters, and stay focused on your end goal, you can grow your business that much quicker. In this article, I’m going to share my top finance tips for small business owners.
1. Get cloud accounting software
I’ll be honest, accounting software saved my (business) life. True story. This is one of the best investments you can make as a small business owner; it will help you save a lot of time, become more productive, and get better results.
With a good accounting software tool, you will be able to:
- Easily keep track of all your expenses (most tools allow you to take pictures of your receipts and simply upload them).
- Create professional invoices easily and quickly—and since all your expenses are tracked, you can make sure that you’re billing the client for every expense.
- Avoid paperwork.
- Handle your taxes in a fraction of the time.
- Keep an eye on your inventory and all your transactions.
- Know exactly how much cash you have, as well as who needs to pay you.
It might be an extra investment, but ultimately, accounting software will also help you save a lot of time and even money. And sometimes, time can be more valuable than money:
2. Save time
As a business owner, your time is very valuable. In fact, bad time management can lead to losing business opportunities, losing money, and even to depression if you’re feeling unproductive. Not to mention, you’re losing money every time you spend hours on a task that, while essential, doesn’t help you make any money.
Instead, invest in virtual assistants or outsource tasks to help free up your time. Start by carefully tracking your time:
- What daily tasks are taking up your time?
- Which tasks take too long—much longer than they should—especially those that don’t help you grow your business, or help you make money?
- Which tasks could be easily handled by others?
- Which tasks are ones only you can do?
Spend some time looking over the results so that you can identify the tasks that are taking too long, and need to be cut down immediately. Consider how you can delegate all of these time-consuming tasks: Can your existing employees take over some of the tasks? Would outsourcing be a worthwhile investment?
It’s natural to be reticent to trust someone else; I’ve been a solopreneur/entrepreneur for years now, and I still find it difficult to trust others to do what I believe I can do better—and that’s a normal feeling to have when it’s your business, your passion project. You care about it the most, so obviously, you’re the best person to manage it. But the reality is, you can’t do everything by yourself. Without help, you could work yourself into an early grave, or lose your business, just because you don’t have enough time to do everything.
Getting help may be an extra expense, but it frees up your time to make even more money—in that sense, time really does mean money.
A few tasks you can outsource include:
- Content creation
- Project management
- Personal assistant/virtual assistant to help with your everyday tasks
- Payroll processing and accounting
There are many benefits to outsourcing: saving time, cutting down costs, being more efficient, and so on.
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- How to Create A Great Investor Pitch Deck for Startups Seeking Financing
- 17 Key Lessons for Entrepreneurs Starting A Business
3. Keep track of all your spending
If you’re struggling and want to make the most of your money, keep track of everything you’re spending, similar to how you track your time. Then at the end of each week, sit down and evaluate your spending:
- Where is most of your money going?
- Where can you cut down on spending?
- What spending is unnecessary?
You can almost always find a way to cut down on spending. Sometimes, it happens quite simply by stopping to pay for certain things; other times, it’s by changing your everyday habits. And then it can also happen by finding better, more sustainable alternatives.
Some ideas for where you can cut down the costs for your small business include:
- Employees: Invest in your best, most efficient employees and then outsource the rest of the tasks. When you outsource, you save money—no health care, no retirement plans, no paid time off, etc.
- Marketing: Focus on more cost-effective marketing strategies, such as social media and content marketing, and most importantly, be where your audience is.
- Office costs: Do you really need all that space? Or better yet, so much of what we do is digital, so can your business be run from your home?
- Tax bills: Get a good accountant and/or use a capable accounting tool to help you make the most of your deductions and save money on taxes.
- Technology: Use technology that will help you save time and money. Cloud computing, marketing automation, and more is now easily accessible to small businesses, not just big companies —and these technologies can help you save both time and money.
4. Put money aside—and make it work for you
If you’re building a scalable business, it’s good practice to think of the future and keep it mind with every decision and business move you make. And to grow your business, you’ll need money. If you make enough of a profit that you can put some aside—no matter how little—then do it. Your future self with thank you.
It’s also a good idea to be prepared for the worst. If there’s an economic crisis, or if your business encounters any issues along the way, you want have some money put aside to tide you over or help you turn things around.
Even better, try to invest your money and make it work for you. It doesn’t have to be a lot of money and it also doesn’t have to be a risky investment. There are plenty of low-risk investments that you can put your money into, such as bank savings accounts, different types of bonds, money-market securities, ETFs, and so on. You might not make a lot of money, but you’re keeping your money safe for when you really need it. In the meantime, your money’s also growing—in time, you could potentially see a decent return.
And sometimes, just the fact that you can’t spend that money is a huge plus. You’re going to need it when you take your business to the next level.
Conclusion
I’ve been a small business owner and entrepreneur for over 10 years, so I’m no stranger to the financial struggles that come with this life choice. Running a business takes a lot of work—much more than most people truly realize—and staying on top of your finances can really take a toll on you. Follow the tips outlined here and it will save you money, time, and your sanity.
RELATED: Top Sources of Business Startup Financing
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