5 Financial Tips to Help Your Small Business Thrive

Becoming a small business owner is a bit of a gamble. Did you know that 50% of small businesses fail in the first five years of operation?

While there may be a number of causes behind these failures, it typically comes down to finances. The owner may have too much overhead, not enough sales revenue, poor marketing tactics, etc.

We don’t want to see you become a part of this statistic. Nor does your professional success need to hinge on fate. Keep reading for some of our top financial tips to help keep your business in the black.

1. Minimize Your Overhead Costs

One of the most common reasons that so many small businesses fail is that the owners bite off more than they can chew. Yes, starting a small business with absolutely everything you want feels empowering. However, in some cases, it’s much wiser and more financially prudent to start small.

The more supplies, equipment, and personnel you bring into your company, the higher your overhead costs are going to be. One of the most practical finance tips is to start smaller and take time building up your reputation and customer base. Then, implement a manageable growth strategy.

2. Record Your Income and Expenses

Learning how to manage finances means learning how to use QuickBooks or another type of bookkeeping program. It’s incredibly important to record your incoming and outgoing cash.

This will not only help you track your cash flow, but it will also help you identify areas in which you’re wasting money. Just as importantly, by faithfully recording your cash flow each month, you’ll be able to see long-term trends and patterns.

3. Create a Budget

Building a business budget is one of the most valuable and important financial tips. Budgets help business owners, managers, and other decision-makers stay within their means. If you’re winging it each month and hoping for the best, you’ll end up spending too much money more often than you think.

Creating a budget will also help you keep your finances organized. You can set aside a specific amount of cash for each department or business expense. In order to this, you can assign a startup credit card to your employees where you can pre-assign funds to avoid overspending. 

4 . Work With a Financial Advisor

Financial advisors specialize in money management for personal and commercial clients. They can help you create a budget, make long-term goals, cut back on unnecessary expenses, and more.

While financial advisors will cost your business more money, they are worth every expense. This is especially important if you don’t have experience working with finances or making a budget.

5. Use Free Online Resources

Finally, while we do recommend paying for a financial advisor, there are plenty of free online resources you can use to help you manage your business finances. You can find free paystub generators, an invoice template, cashflow documents, and more.

Before paying for a product or service, search online to find free options. However, if you feel like you’re in over your head or don’t know what you’re doing, it’s best to work with a professional.

Looking for More Financial Tips?

Properly managing company finances is essential to your business success. We hope these financial tips help you get started on the right foot.

But if you need more financial advice or small business guidance, we have more to offer. Check out some of our other articles before you go to find more information on how to improve your business.