People start businesses for all kinds of reasons — to provide a service, to pursue a passion, to fill a gap in a particular market. And, let’s be honest, to make money. While it might not be the most important thing to every business owner, it’s always a priority. Not only is profit an obvious perk, it’s an essential part of success, growth and longevity. And once you have those things, money management is key to continued success, which is why we chatted up an expert for his financial advice.
Even if you’ve built a successful business, mismanagement of money can cause damage or, even worse, failure.
Considering the incredible amount of hard work that goes into creating and maintaining a business, you wouldn’t want to neglect such a fundamental piece of it — one that can determine your future, for better or worse.
Financial practices will vary depending on the kind of company you run, but every small business owner should keep accounting, forecasting and analysis in mind. Finances not your forte? Luckily, there are plenty of apps and programs that take the guesswork out of money matters. And, even if you are a pro at crunching numbers, technology can make tracking and planning more convenient and accurate.
Financial advice from expert Johnny Martin
We asked Johnny Martin, founder of The Numbers Coach, for his expert advice on small business finances. Read on and check out the video clips for his helpful tips.
Practice better budgeting
Some business owners think that their own personal finances won’t affect their company’s cash. In fact, the two are totally linked. Even if you have your business budget in order, it can suffer if your own money is a mess. Use the right tools to keep careful track of company money and, while you’re at it, your own personal budget as well.
Use the right tools
Excel is the go-to program for many business owners because it’s affordable and familiar. But it’s not a catch-all. While Excel is an excellent choice for analyzing existing data and forecasting the future, it’s not ideal for the all-important task of day-to-day accounting. Online apps can help you keep your accounting accurate, which is essential for taxes and more.
Know your cash flow
Money is money, right? Well, not really. There’s an important difference between profit and cash. The figure in your business bank account certainly matters, but you have to take into consideration working capital — money that’s tied up in other places. That’s why careful management is so important.
Protect your worth
Protect your small businesses by properly managing your money. While it might not be the most fun part of the job, there are plenty of tech solutions that make it easier. Just remember, precise accounting and thoughtful financial planning will set you up for continued success.
Wondering how to start your own UK business with no money? Then check out this guide.
And read this article if you're curious as to how to get a business loan.
