Being a veteran in the banking industry, I can’t stress enough how important it is for small business owners to be in control of their finances. Whether you are a seasoned entrepreneur or a first time business owner, having a strong understanding of your business’ finances is one of the best things you can do to ensure growth and success.
Here are a few of the best tips I’ve compiled during my time helping small business owners:
Talk to Your Employees:
One of the first, and easiest ways to understand where your business’ money is best being spent is to look to your own employees for insights. Why you may try to be, there is no way you can be fully involved in every aspect of the day to day activities. Your employees are the experts in their position, which is why asking your employees about the cost of expenses and what they think can be done to reduce them this is vital to your success. Letting employees take initiative to find cost alternative solutions is also a great way to promote employee engagement while cutting down on unnecessary costs.
Take Advantage of an Expert’s Services:
Just because you’re an expert in your field, doesn’t mean you have to be a finance expert as well. There are plenty of community bankers, accountants and lawyers out there to make sure you are spending money wisely and making the best decisions that result in profit. Community banks are very small business friendly and often time offer extra financial products and services for owners who need financial counseling.
Don’t Overinvest Before You’re On Solid Ground:
It can be easy to get caught up in the excitement of owning a successful small business and fall into the trap of upgrading to a fancy office or ordering large amount of inventory when product seems to be flying off the shelves. This is a pitfall small business owners often fall into and sadly this can take a business down. Don’t be afraid to celebrate your success, but make sure to keep in mind that you want to keep your bank account full too.
Keep it Separate:
One of the best pieces of advice I can give to small business owners is this; do not combine business and personal expenses. In order to keep your company’s books clean it is never a good idea to take cash out of a business account for personal use and vice versa. While it may seem like no big deal once or twice, it’s very easy to forget to go back and straighten the accounts out. Just keep it separate to reduce your personal liability.