Many successful entrepreneurs attribute their success to good financial habits. When starting and running your business, how you approach your finances could determine whether it fails or succeeds. If you want to see your business grow, here are four smart money habits you should adopt today.
1. Pay yourself
When running a business, it is crucial that you separate your personal and business accounts. One of the best ways to help you do this is to ensure that you compensate yourself accordingly. Paying yourself a salary ensures that you have your own income so that you don’t dip into your business funds.
2. Track spending accurately
In the first few years of your business, you must keep and track your spending records. If you manage your accounts by yourself, try and identify expenses that keep fluctuating. If your operating costs are too high, consider cutting off expenses that do not benefit your business. If you work with an accountant, ensure that you meet with them as often as possible to go over your spending habits. Knowing where every pound goes will help you manage your finances wisely, allowing you to funnel more cash into expanding your business.
3. Don’t be afraid of loans
Many business owners are afraid of procuring loans because they worry about the financial repercussions that come with them. Debt isn’t necessarily a bad thing if used as a tool for driving business growth. A business loan can help you boost your cash flow, purchase equipment, or even expand your business. That said, you have to be strategic when taking on debt. Plan on how you’ll use the money, what kind of debt you’ll take and how your business will pay it back. Try and update your balance sheets, cash flow statements, and profit and loss statements once a month to help you determine what kind of repayments your cash flow can sustain for the short and long term.
4. Make saving a priority
Having liquid savings will give you a solid foundation for pursuing different projects in the future. Review your monthly budget to estimate how much money you can comfortably commit to saving every month, and then schedule an automatic transfer to your business savings account. Automating the process will make saving easier for you and ensure that you do it regularly.
Smart money habits – where to find out more
Tower leasing offers expert advice and various business finance products to help you fund and manage your SME business. Read about our business finance options or contact us today and let us help you.
