The primary objective of a small business is to have maximum profit and minimum financial loss. To be able to stand firm in the shifting economy and to survive the cutthroat competition, small businesses need to exercise adequate financial management from the very start. A coherent financial strategy is the key to success for any small business. It helps in devising effective strategies, setting benchmarks and framing practical steps to achieve the goal. A proficient financial structure and excellent management skills are fundamental to the success of a small business.
But before we list down some crucial financial management strategies for small business, let’s get acquainted with financial management.
It is a crucial and strategic function of running a business smoothly, be it small business a multinational corporation. It involves mapping the financial and non-financial resources of the business concerning the objective of the business. Financial management is an adept planning tool that ensures how the capital is raised, invested and efficiently utilized. Financial management also helps the business owner in identifying and analyzing the problem areas and work towards developing financial strategies accordingly.
SEGREGATE PERSONAL AND BUSINESS FINANCES:
There is a possibility of small business owners mixing up their business and personal expenses. Make sure you get different bank accounts, from where you can easily do all the business transaction. This will help you keep a tab on the outlays and keep your expenditure in control. This can also help you with tax payment. Adhere to your personal and business budget to avoid ambiguous account records and personal liability. This will also help lessen the burden on the book keeper, and the account and they will be able to generate financial records quickly.
SET SPECIFIC FINANCIAL GOALS:
A clear vision and realistic goals set apart the successful business from the not-successful business. Introspect and identify your specific financial aspirations. Is growth? Acquisitions? Consolidation? Knowing your specific purpose will help you structure tailored business and financial strategies.
TIMELY BILL PAYMENT:
Make sure you pay all the bills including utility, vendors, credit cards, etc. on time without any delay. If payment is not made timely, it might consistently add up to a considerable amount and cost overall financial health dearly. Similarly, file and report tax return before the due date. With small business a minor profit-loss margin can make all the difference towards the end of the financial year; hence small business owners must inculcate a habit of setting up reminders for bill payments.
Keep your company’s financial records in check. Be well-informed about every small and big financial transaction. Comparing them with the previous transactions can help in determining the future revenue, cash flows, expenses thereby helping you make better-informed decisions.
If you have just started your own business or are a small business owner and you are overwhelmed by all the bills, reports, overhead expenses; you could use the help of a professional financial advisor, like Donald Malter. He is a veteran financial advisor in the field of media and entertainment. With a pervasive experience in private equity firms and media companies, he can help you in incorporating constructive financial management strategies helping your small business flourish.
About Donald Malter
Donald Malter is an American entertainment and sports executive with the ability to manage financial strategy and operations during dynamic growth, turnaround, repositioning and change phases. For more information connect with me on Twitter, Pinterest, Google+, and linkedin.