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Our guest blogger today is Steven McMeechan, he is a strategic marketing and communications specialist with over twenty years’ experience in senior marketing management roles across a range of industries including Information Technology and Financial Services. He works for Capstone Financial Planning and lives in Melbourne Australia. He is here to talk to us about powerful financial advice for women for improving your financial situation in business.
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Whether it’s admitted or not, most businesses begin and end with finance. In addition to greater freedom or ability to better serve clients, money is often a key motivating factor for founders starting a business. Finance significantly defines the success of any business, and allowing a company to sustain itself and continue operating. In order to improve your financial situation in business, consider the following financial guidelines.
Don’t take on large expenses prematurely.
Revenue is extremely difficult to predict, especially for newer and/or smaller businesses. When first starting out, it almost always takes longer than projected for money to start coming in, and once it does income is often much smaller than anticipated. To avoid operating in the red, be conservative when taking on expenses. This includes not investing too much in equipment, holding off as long as possible on hiring staff, and not taking too much office space (or office space at all, if it can be avoided).
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If you’re starting a new business but still have a full-time job, hold on to your current income stream as long as possible. Even if you need to shift your hours or work part-time, that income can help to sustain you while growing your business, and even help to cover some business expenses in a pinch. You can always work on your business during evenings or weekends. If you can’t, try asking your current employer if you can work on weekends to free up part of the week to focus on your own venture. If you don’t have a full-time job, but can use your skills for consulting or freelance work to supplement your income while building your business, consider this as an option as well.
Keep detailed records of everything financial.
Very early on, invest in some accounting software – there are cost-effective options available and plenty of tutorials on how to use them. Be sure to set your system up for dual-entry accounting. If you didn’t take accounting classes in college, there are tutorials online or a knowledgeable friend can help you set it up. The goal is not just to keep track of every dollar that flows into or out of your business, but to categorize every dollar of revenue or expense. That way you can quickly see what parts of your business earned what money, or in which areas money was spent. This information may seem superfluous at first, but it will be critical when you need to make strategic decisions about how to grow your business or where to make cuts. Investing in already-productive areas of your business, or making cuts in areas that are already suffering, can be far more advantageous than some alternatives.
Always seek efficiency.
In business as in life, people are always trying to sell you things that you don’t need. Vendors try to get you to buy unnecessary trinkets, or will try to up sell you on services or add-ons that don’t contribute anything to your business. Sometimes salespeople aren’t solicitors calling on the phone, but your very own staff. People have a habit of making work that isn’t necessary, but gives them better security in their job or helps them pass the day easier. As you consider your operations, make sure that there is no redundant work going on. Redundancies and extra work both cost money. Once you’ve got detailed financial records, you will begin to see the impact of different areas of your business operations. It’s important to use that knowledge to make sure your company runs efficiently and put yourself on the best possible financial footing.
As complicated as we sometimes make it, finance isn’t rocket science. It can seem like a daunting aspect of business at first, dealing with so much information all tied together. Like anything else, it requires study and attention to become an adept financial operator. However, careful attention and time dedicated to structuring and keeping current on your business finances is the first prerequisite to improving your company’s financial situation. To give yourself the best chances of success in business, be sure to follow the advice above; and don’t be afraid to leverage the resources and knowledge you gather to improve operations and the finances of your business.
Do you have your finances in order? Leave us a comment below.
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