You don’t have to be a financial expert to run a successful small business. At least, not anymore. Thanks to the Internet, all it takes is a few easy clicks to see simple breakdowns of the most important rules for maintaining a tight budget and steady cash flow. It all comes down to knowing which expenses deserve the most attention and taking advantage of every opportunity to save money.
Business owners must also have a solid grasp of which elements of their strategies are most responsible for generating revenue. Once you become aware of exactly how your business makes money and can avoid spending too much, keeping track of finances will be just another task you conquer with ease every day.
Here are 5 tips for any small business owner who is confused about financing:
DON’T PUT OFF ACCOUNTING
LessAccounting founder Allan Branch told Entrepreneur.com that one of the most common mistakes he sees small business owners make is procrastination. Whether it’s sending out invoices, paying employees or just categorizing expenses, you must tackle all bookkeeping-related needs as soon as possible. The longer you put off these tasks, the harder they become to manage. Expenses will pile on top of each other, forcing you to devote so much time and energy to bookkeeping that you are unable to focus on growing your business.
Being a small business owner means dealing with multiple problems at a time. Eliminating financial confusion or disorganization, however, should be your top priority because it likely poses more danger than any other reoccurring problems you might have. Luckily, gathering the strength to fix the problem is far more difficult than actually fixing it.
HIRE AN EXPERT
Many business owners are so swamped with work that they don’t have time to monitor finances and make quarterly projections. Accounting needs cannot go ignored, so you need to hire someone who will handle it for you. Bookkeepers alleviate all finance-related stress, most notably when it comes to federal and state taxes. He or she will keep expenses organized, know how much money is going out and coming into your business, look for discounts on inventory, and keep track of all expenses that can be deducted from taxes.
RECRUIT YOUR NEW STAFF NOW!
If you don’t have cash on hand to take on a vital new hire, alternative business lenders like United Capital Source are here to offer funding programs specifically tailored for this dilemma. A working capital loan, for example, can supply you with an amount approximately equal to the cost of running your business month-to-month, or you can get more than that if your business is doing well. You could cover all the expenses associated with recruitment (equipment, benefits, etc) without worrying about not being able to pay bills, rent or your other employees.
Applying for a loan from a bank involves mountains of paperwork and waiting several months just to hear whether or not you’ve been approved. It will likely take double that amount of time for funding to reach your bank account. UCS, on the other hand, is able to approve financing in under 24 hours and distribute funding in a matter of days. You can’t waste any more time without a bookkeeper, and funding from UCS would allow you to recruit your new hire immediately.
Operations might slow down while your attention is devoted to searching for and interviewing potential candidates. The drop in revenue wouldn’t put your business in danger thanks to your loan, which will buy you all the time you need to find a bookkeeper you trust.
TRACK SEASONAL CASH FLOW
Virtually all businesses experience seasonality, or a fluctuation in revenue during certain times of the year. There is a slow season, when sales are down, followed by a busy season like the summer or holidays. Though two businesses might make the most sales during the summer, one of them might be more active during the early summer as opposed to late August and September. Certain businesses experience also increases or decreases in revenue during less conventional periods, like accounting firms, which are the least busy from April to October.
This is why it’s crucial for business owners to know exactly when they will be hurting the most and when they should expect to recover. Tracking seasonal cash flow will tell you when you’ll need to have extra capital available for the slow period as well as when you should start preparing for the busy season to ensure a strong performance.
ROUGH SLOW SEASON? NO PROBLEM!
The slow season can be brutal for some businesses, preventing them from making the necessary investments for the busy season. These businesses have been known to take out Merchant Cash Advances to afford all the inventory, new hires, and marketing initiatives they need at this time. A Merchant Cash Advance supplies a lump sum of capital today in exchange for a percentage of your future credit card sales. There are no due dates or fixed, monthly payments, and the deductions to principal are made daily when credit card transactions occur.
You could cover your expenses during the slow season, giving you plenty of capital to run your business. The lion’s share of the debt is paid off when your investments produce and increase in sales.
UNITED CAPITAL SOURCE = “SMART FINANCING”
The title of this article speaks of “Smart Financing Tips,” and additional funding is the answer. A bookkeeper and a strong busy season are absolutely necessary for a business to survive, so you must invest in each of them. UCS has helped countless businesses increase staff and maximize potential for performance. Give us a call today and you’ll find out that a simple one-page application can make your job infinitely easier!