In Capital One’s latest Spark Business Barometer, it was found that only 57 percent of small business has a checking or saving account as their primary business spending method. During “Seize the May” this month, Capital One will provide small business owners with a wide variety of offerings across banking, lending, merchant services and retirement for the second year in a row. It’s important to get your finances right as a business owner because if you don’t know one else will. If you don’t know how much revenue you’re making, what your expenses are and what accounts they are being drawn into, then your company is broken. While the last post aimed to make you a more optimistic business owner despite the current political environment, this one is meant to educate you on managing your finances so you have more control over your business.
Here are some tips on how you can get savvy with your business finances:
- Hire an accountant. Not only do I have an accountant but all of my peers do as well, and we all believe it’s necessary. Not everyone knows balance sheets and income statements or has time to worry about it either. By outsourcing your accounting, you free yourself time to run your company. They will handle your taxes and help you understand the flow of money in and out of your company, which is essential to running a business.
- Educate yourself. Every small business owner should have some education on what it takes to run a business from a financial standpoint. The good news is that there are endless free or low cost courses online that you can take at your convenience, even from your mobile phone! Even if you hire an accountant, it’s important that you have some financial education so you can tell if they are doing a good job or not.
- Cut costs. The lower your costs, the more likely you are to stay in business and have less stress. Look at all of your expenses, and find ways to eliminate things that aren’t necessary to running your business. For instance, review your travel costs to see how you can spend less on hotel rooms, airfare and food. Every little bit counts especially as a small business where resources aren’t abundant.
- Don’t hire staff too early. Some small business owners will just start hiring as money is coming in but it’s not always so wise. Talent is your most valuable yet largest expense so hire slowly as you need it. In my company, we focus more on freelancers until we’ve grown to a capacity where we hire a full-time permanent employee.
- Set financial goals. Once you can control your costs, look ahead to maximize your revenue. Set big financial goals so that even if you don’t hit them, you’ll be making more money. Project your annual revenue based on your previous revenue numbers and make it ambitious so that you and your sales team are pushed to deliver.
This blog post is sponsored by Capital One.