In business, we can focus a lot on ways to save money. But the truth is you’re always going to have to spend before you can make anything. And it’s in this very fact that you’ve got to find a balance — you’ve got to handle your finances on either end to ensure your company can make it past the first year. And that is far easier said than done. However, it doesn’t have to be far too difficult to manage. You’ve got a business on your hands that needs to stay afloat past its startup months, and there are many ways you can invest in this. Here are the methods we recommend.
By Team Savant
Image: Kelly Sikkema
Have A Plan
A financial plan is always a good thing to have in place the moment you start thinking about spending and earning on such a scale. After all, a plan will help you to identify and meet goals in a variety of areas, and it’s the best way to save money no matter what decisions you end up making.
It’s mostly a budget, but it also goes beyond that. Not only does it track what you spend and what you make, but it also shows you where you could cut business costs, and where you can focus your energies to make even more money. For example, if you host multiple product and/or service lines, it’s always a fact that one makes more money than the other. A financial plan will help you see that.
Keep On Reframing Your Budget
So, once you put your financial plan in place, don’t just let it sit and do no more work for you. You’ve got to be flexible with what it tells you, and how you need it to help you. In other words, always go back to the drawing board with it, and make sure you’re putting in new numbers to better reflect your current circumstances.
For example, if your company runs into an emergency, or you need to pay for more stock in one month, it’s clear your profit and loss lines need to budge along. And remember seasonal events — the budget you made in January isn’t going to be relevant for the one in December!
Think About Joining a Credit Union
For small businesses and entrepreneurs like you, a credit union is always a good thing to look into for your financial security. In the early months of your company’s lifetime, a credit union can help you secure that loan, and keep those savings safe, without running into high interest rates or being turned away for a bad credit score. And there are a lot more pros than there are cons; a credit union is a non-profit, after all, and it’s there to help local people get the most out of their community.
Is your business capable of surviving for the next 5 years? Only if you’ve got a plan to follow and plenty of resources to make good use of.