Being a small business owner presents its own unique set of challenges — and one of the main ones is that you don’t have the budget you need to do everything you need to do. A successful business needs constant investing if you want it to keep growing — more marketing spends, product or service improvement, getting more people to join the team, and so on. But, if you are careful with your finances, invest only in what matters, and you keep focused on your end goal, you can grow your business that much quicker.
In this blog post, I’m going to share my top finance tips for small business owners.
Get cloud accounting software
I’ll be honest, accounting software saved my (business) life. True story.
This is one of the best investments you can make as a small business owner; it will help you save a lot of time, become more productive, and get better results.
With a good accounting software tool, you will be able to:
- Easily keep track of all your expenses (most tools allow you to take pictures of your receipts and simply upload them)
- Create professional invoices easily and quickly — and since all your expenses are tracked, you can make sure that you’re billing the client for every expense.
- Avoid paperwork
- Handle your taxes in a fraction of the time
- Keep an eye on your inventory and all your transactions
- Know exactly how much cash you have, as well as who needs to pay you
It might be an extra investment — but ultimately, accounting software will also help you save a lot of time and even money. And sometimes, time can be more valuable than money:
Time means money
As a business owner, your time is very valuable. In fact, bad time management can lead to losing business opportunities, losing money, and even to depression.
When you’re unproductive and losing time on repetitive, time-consuming tasks, instead of reaching your goals, it can play with your mind. It can make you feel like you’re not progressing, or even worse, that you’re moving backwards — and that’s a dangerous thinking to have as a business owner.
Not to mention, you’re losing money every time you spend hours on a task that, while essential, doesn’t help you make any money.
Instead, invest in virtual assistants and outsourcers to help free up your time. Start by carefully tracking your time:
- What daily tasks are taking up your time?
- Which tasks take too long — much longer than they should? Especially those that don’t help you grow your business, or help you make money
- Which tasks could be easily handled by others?
- Which tasks only you can do?
Spend some time looking over the results so that you can identify the tasks that are taking too long — and need to be cut down, immediately.
Consider how you can delegate all of these time-consuming tasks: can your existing employees take over some of the tasks? Would getting an outsourcer to help be a worthwhile investment?
It’s natural to be reticent to trust someone else; I’ve been an entrepreneur for years now, and I still find it difficult to trust others to do what I believe I can do better — and that’s a natural feeling to have when it’s your business, your passion project. You care about it the most, so obviously, you’re the best person to manage it. But, the reality is, you can’t do everything by yourself. Without help, you might work yourself into an early grave, or lose your business — just because you don’t have enough time to do everything.
Getting help might be an extra cost, but it frees up your time to make even more money — in that sense, time really does mean money.
Some of the tasks you can use outsourcers for include:
- Content creation
- Project management
- Personal assistant/virtual assistant: for helping with your everyday tasks
- Payroll processing and accounting
There are many benefits to employing outsourcers — saving time, cutting down costs, being more efficient, and so on.
Keep track of all your spending
If you’re struggling and want to make the most of your money, try to keep evidence of everything you’re spending — kind of like with your time, previously.
Then, at the end of each week, sit down and evaluate your spending:
- Where is most of your money going?
- Where can you cut down on spending?
- What spending is unnecessary?
There’s almost always a way to cut down on spending; sometimes, it’s by quite simply stopping to pay for certain things. Other times, it’s by changing your everyday habits. And sometimes, it’s by finding better, more sustainable alternatives.
Some ideas for where you can cut down the costs of your small business include:
- Employees: invest in your best, most efficient employees and use outsourcers for the rest of the tasks. They are much cheaper to employ — no healthcare, no retirement plans, no paid time off, etc.
- Marketing: focus on more cost-effective marketing strategies, such as social media and content marketing. And most importantly — be where your audience is.
- Office costs: do you really need all that space? Or better yet — could you work from home? So much of what we do is all digital — can your business be effectively run from your own home?
- Tax bills: get a good accountant and/or use a capable accounting tool to help you make the most of your deductions and save money on taxes
- Technology: use technology that will help you save time and money. Cloud computing, marketing automation, and all of this technology is now easily accessible to small businesses, not just big companies — and they can help you save both time and money.
Put money aside — and make it work for you
If you’re building a scalable business, it’s good practice to think of the future and keep it mind with every decision and business move you make.
In order to grow your business, you’ll need money. And if you make enough of a profit that you can put some aside, no matter how little, then do it — your future self with thank you.
It’s also a good idea to be prepared for the worst; if there’s an economic crisis, or if your business encounters any issues along the way, you want to rest assured that you have some money put aside to tide you over or help you turn things around.
Even better, try to invest your money and make it work for you. It doesn’t have to be a lot of money and it also doesn’t have to be a risky investment.
There are plenty of low-risk investments that you can put your money into, such as bank savings accounts, different types of bonds, money-market securities and ETFs, and so on. You might not make a lot of money, but you’re keeping your money safe for when you really need it and in the meantime, it’s also growing — in time, you can potentially see a decent return.
And sometimes, just the fact that you can’t spend that money is a great plus — you’re going to need it when you take your business o the next step.
I’ve been a small business owner and entrepreneur for over 10 years, so I’m no stranger to the financial struggles that come with this life choice.
It’s a lot of work — much more than others truly realise — and finances can really take a toll on you. Follow the tips outlined here and it will save money, time, and your sanity.
What other finance tips have helped your small business?