If you own a small business, you will understand how important it is to keep track of finances. Sometimes this can become difficult but it is vital to keep control of spending so your business can thrive. If you are just starting out, the importance is even greater as you will want to carry these habits with you throughout your time running your company. Here are five essential tips for keeping good financial habits as a small business owner:
1: Have Emergency Funds
When running a business, you never know what the future holds. There may come a time when your business needs a cash injection, and having emergency funds for such a time could be a life-saver for your company. Put some money aside for an emergency and one day you might be grateful you did so!
2: Use Software Management
These days you can get a job done in five minutes when it used to take a full day. Software management has a hand in that – for time-consuming jobs such as doing payroll, consider investing in a payroll tool like Zenefits, which calculates all of the wages and taxes, giving you more time to focus on other areas. Money is time, especially when you run a company, so finding ways to cut down on that will help you financially.
3: Keep Separate Personal and Business Funds
This one is especially vital. When starting a business, it will be easy to blend your personal money with your businesses, but this is a habit you should get out of early on. You don’t want to put any financial burdens of your business onto your livelihood, and taxes will be much harder to do if you are mixing funds. Try to view your personal funds like you would an employee’s wage, and keep it distinctively separate.
4: Keep an Annual Budget
Keeping an annual budget ensures that you are in full control of your expenses and you are less likely to go overboard on spending. Calculate your rough spending each year to inform you of next year’s budget. Just remember, there will always be extras you didn’t think about so include a little leeway.
5: Write a Schedule
As previously mentioned, money is time. This means you don’t want to be wasting any of your precious working hours. That does not mean you should work eighteen hours of the day but you should keep and stick to a schedule. If you have a list of jobs to do for the day, write them down and create an hourly schedule. It may feel like a school timetable but it will ensure you get all your jobs done at the proper time!
6: Promote a Happy Workplace
Your workers are essential to the running of your business, and happy workers equal productive workers. A positive work environment isn’t just beneficial to your mood, your pockets will be thankful too – increased productivity means more time for other areas of work!