The keyfactor to a healthy financial records for your company are organization and staying up-to-date with the trends occuring. This means having an accountable management team and constantly elevating your workers knowledge to put into practice. Paying for your own productions costs, transportation costs will make your company less likely to fail. Having a healthy credit score and not selling your company's stock to have the total controle will make your business' financial statements rock solid.
Why is it important to manage your buisness' finances?.
Having plans is great. It is important to stay up-to-date about the tools and tricks that makes your task as a small business owner to take a load off your back. Such as the new technology. This can be POS (Point of sale) system to help the customers faster to prove the quality of your small business' customer service. You need to train your workers constantly to get to know inside knowledge of the market and products to supply the need of the customers. New advanced product features that is setting trend should be part of your stock to generate more profits. Tasks like accounting you can outsource but this means a extra cost. If you can do this your self you will be saving money.
It is better to pay the cost out of your turnover.
To save the costs of interest you should not apply for a loan to keep your business save. You should set money apart out of your profits for extra costs such as tax, transportation costs, production costs, production costs. As a small business you can scale your business if you do not apply for a loan. In case you think your credit score is high enough to get a loan then you can think about adding costs of the interest to the end price of your products or services. But the bank will ask for a colletral. This is kind of risky to put your company's or your store's building as a colletral.
Invest your profits in the future growth.
You should keep a close eye on the future. Having the vision of scaling your buisness by hiring more employees, selling more units or producing for larger market will help you generate more profits. You can invest in things like new machines, new software or more specialized personell. Invest in new verhicles to transport your products or personell. Invest in new trends and knowledge of your employees. Invest in innovation such as making new advanced versions of your products. Be creative to find solutions for time consuming tasks and focus on the best quality of products or services.
Focus on a healthy credit score.
The best thing to realize this is to pay your debts on time and cut costs by finding solutions such as not stacking up debts on your credit card. You should pay the credit card debts in few weeks of time. To buy new commercial real estate you need to grow and you need a good credit score to buy new real estate for your business. You can not start a buisness without a loan unless you have assets of your own to start the way wish. Bank wants to know if your business plan is solid and accountable. Bank is not going to give you a loan unless you can proove them to that you can pay off the interest rate and money you borrowed on time. You can apply for a business loan to have a load off your back if you just starting out.
Manage your billing terms.
Give the customers the chance to pay on time by offering discounts. There will be always some customers who have problems to pay. Stimulate these customers with phone calls and e-mails. If you manage your billing strategy properly then you will have a good cash flow. Having a good cash flow means that you are on your way to have a good financial statements. Having a bad cash flow will make your business weak somehow. It is not wise to treat the customers who do not pay on time as criminals. These customers might be also another buisness or a company that would not pay because they rather let the money freeze. On their bank's savings account for another couple of days because of they want to earn interest.
No comments:
Post a Comment