It’s no secret that staying on top of your budget is key to succeeding in small business. In fact, financial instability is one of the most common causes of small business failure.
So how can you make sure your business doesn’t become a statistic? Just a few easy steps could help you cut costs and boost profits.
Here are 5 easy ways to make your business budget more bulletproof:
- Separate your bank accounts. Don’t mix your business and personal finances. If you’re mingling the two and you happen to default on a business loan, it’s much easier for creditors to come after your personal finances. Separating the accounts helps to protect your personal viability if anything goes awry. And that’s not the only perk – splitting up your business and personal finances also makes it easier to file taxes, avoid audits, create financial projections, and streamline your business spending.
- Track your spending. Stuffing all your receipts in that top drawer isn’t going to help you improve your profitability. If your bookkeeping needs are fairly simple, create a spreadsheet to track your expenses – or if you’d like a solution that offers a few bells and whistles , download an app that does it for you. This will help you spot opportunities to increase revenue, cut costs, and take advantage of write-offs.
- Create a financial cushion. Make sure you’re prepared to survive slumps and unexpected costs by securing financing like a line of credit or business credit card. With one free application, Lendio gives you access to financing options from 75+ lenders. Spending a few minutes creating a financial cushion now could help you keep your doors open later on.
- Remember that time is money too. How many of your manual daily tasks could be automated? How much time do you waste listening to the same chatty, long-winded client again and again? Any time you spend over-servicing or otherwise unable to work on activities that bring in revenue is unprofitable time. If you want to increase profits, be selective about what you spend your time on. You’ll soon find more hours in the day and get more bang for your working buck.
- Assess and update your budget periodically. If you’re consistently spending more than you anticipated for specific costs, it’s time to adjust your budget. Analyze your spending and make adjustments in any areas that are consistently high or low so that you’re working with an accurate picture of how much you spend. This will help you avoid financial surprises and cut costs that are getting out of hand.