Managing Money When You're First Starting Out in Business

Being able to manage your money effectively can be the difference between a business succeeding or failing completely. When you run a company, you really do need to spend money to make money so it’s crucial to get this right so you’re turning enough profits. Before opening your doors, make sure you have these things sorted.

Budget efficiently

Overspending can quickly lead to financial disaster. As a business, it’s often a very fine line between what you spend and your profits. You need to invest enough money so that your product and services are the best they can be, but this needs to be balanced with how much you can realistically earn back. A budget is absolutely crucial, every penny should be accounted for. Accounting software can help you keep track and manage your finances much more efficiently. Before opening the doors to your business, be sure you’ve planned where money will need to be spent. Everything from your office premises rent to your marketing to any outsourcing, hiring costs and more all need to be planned and prepared for.

Get insured

It’s every business owners nightmare- being taken to court. Even a simple mistake can land you in serious hot water. Imagine you forget to put down a wet floor sign and someone falls and hurts themselves as a result? Even the most careful businesses can sometimes fail, and so for this reason you absolutely need the right insurances. Public and employee liability insurances should cover you across all bases- but be sure to check the small print in your policies. Follow health and safety laws to the letter and make sure all staff are trained properly. But of course, measures like insurance give you that added protection and something to fall back on if you need it.

Have a contingency fund

Profits can ebb and flow throughout the year, this is normal for most businesses. They tend to be busier around public holidays and then quieter afterwards. Tax season is another time in the year when it’s likely to be quieter due to people and companies having to fork out for their tax bill. Being aware of when these times are likely to be, and preparing for them is key. You should also plan for disaster, and if your sales drop for any other reason. A savings account with some emergency cash, or access to a company offering small business loans could be the difference between you keeping going and having to shut shop for good.

Know where to spend and where to save

It doesn’t always make sense to do everything on the cheap- in fact, doing so can harm your business rather than help it. Take your website for example, try and make savings here and you could end up with something that looks rubbish and puts customers off at the very first hurdle. Work out where it’s worth making savings, and where you need to invest and spend the extra.

Managing Money When You’re First Starting Out in Business