5 Tips for Managing Small Business Finances.
Hey BBN networker, I hope you are already preparing for the weekend.
Still in the spirit of Global agility enterprise month, we are educating small business owners in our circle about 5 tips for managing their finances.
As a small business owner, learning everyday and acquiring new knowledge on how to improve your business and prepare for the future is important. Survey says 20% of small businesses fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business. In other to sustain your business to move from a small business to eventually a stable company, you have to be resilient and find ways to keep learning.
Here are 5 Tips to help you Manage your finances this year.
1. Pay yourself: Often times we forget that we are employees in our own company. I know there's this urge to invest all the earnings back into the business but we shouldn't forget our role in the company and remember to compensate ourselves from time to time. Ensure that your business and personal finance are in good shape.
2. Invest in growth opportunities: Added to the fact that you have to pay yourself, you also have to invest in improving yourself, your businesses and the services you offer. Take a course, buy another hair dryer if you run a salon, employ a virtual assistant to take care of minor tasks while you focus on growing the business. Always remember to invest in opportunities to grow.
3. Don't be afraid of funding: Especially in the black community, we are very afraid of taking loans. This is understandable, because most probably you don't know the lifespan of the business or if it will yield enough profit to pay back the loan at the specified time but the truth is that you need it. In the early stages of your business, you can't afford to shoulder all the financial responsibilities that comes with starting a new business, so take that loan today.
4. Keep good business credit: As your business expands, you might want to start applying for grants, take out more loans, acquire additional insurance etc. With poor business credit, no one would want to loan you money or think you are worthy of the investment. Getting approval for all there transactions and acquisitions will be very difficult. How to have a good business funding, pay off all your debt funding as soon as possible. Simple.
5. Plan Ahead: The good book says in Proverbs 24 verse 27: Prepare your work outside and make it ready for yourself in the field; afterwards, then, build your house. Even though today's trouble is sufficient for today, always plan ahead. Set systems in place to accommodate a business that will grow.
Walk in faith this week. Until next time, Bye.