Running a business requires a mature mindset and forward thinker to stay on track with planned goals and focused targets. Having successfully started three businesses, I know that starting is the easy part. Making a business sustain is the hard part.
With tax season upon us, I wanted to emphasize three important considerations when it comes to your business’s finances.
1. Treat your business’s finances as your business’s air it breathes
Budgeting should be a top priority of your business. Your business needs money as you need air. Without oxygen, you die, right? Same goes with your business. Without a budget, your business will slowly suffocate.
Budgeting is fact planning. By knowing the facts about how much money your business brings in you will know how bad a cut is when you start bleeding money. What is wasteful spending? What contributes to profits and brings a return? Once you know the facts, you can set your priorities.
2. Be thrifty
Now that you have your budget in line, maintain thriftiness. Even if you know you’ve hit a profitable benchmark, bank any cash you can. Your business will have hardships one day, and a reserve of cash may keep you afloat.
3. Deal with financial problems as soon as possible
Did something go wrong with your cash flow? Deal with it immediately. Just like interest compounds, so do financial problems. When it comes to finances, be proactive and talk your partners, advisors, directors, etc. early and often. The quicker you can get out from one financial hiccup, the quicker you prevent another financial issue.