However, everyone has blind spots and gaps in their knowledge, which may prove detrimental unless you gain insight into how things could change for the better.
Seek financial education and support
Some small business owners may not have a background in finance, which may prove challenging, especially in the beginning phases, where they have to take on many roles. Maintaining the financial health of a company is so important, as it’s essentially what keeps the business alive.
Seeking the necessary financial education and support can really make a difference in your business. This could come in the form of attending workshops or webinars on specific financial topics related to your business, working with a financial advisor or even joining communities with other entrepreneurs where you can learn from each other’s experiences.
Leveraging technology for financial management
In the early stages of your business, one of the best things you can do is invest in the business and set up efficient systems that will benefit you over the long term. Advances in technology have made it easier for small business owners to effectively manage their finances. From budgeting tools to financial management apps and customer relation management, there is a range of software available you can invest in to streamline processes, automate tasks, track key performance metrics and provide insight into your business’s financial performance. All of which can save you time and assist in making well-informed decisions concerning your business.
Accessing funding
A significant barrier to the growth of small businesses is the lack of access to capital and funding. A traditional bank loan is no longer the only source of funding for small businesses as alternative financing options are available, such as venture capital or crowdfunding. There are even competitions you can enter where the winner secures funding. The great thing about competitions is that it increases your business’ visibility and opens the door for other potential investors.
It’s important that you understand and research the different types of funding available and decide which option aligns best with the goals of your business.
Build an emergency fund
While running a business you are bound to run into unexpected financial challenges or emergencies. Although it may be difficult, especially at the beginning, it would be good to develop the habit of setting aside a percentage of the profits each month into a dedicated emergency fund. An emergency fund typically consists of 3-6 months worth of essential expenses, so in the case of any unexpected situation such as having to pay rent, equipment repairs or even having to pay taxes, the business will be able to function as normal.
Regularly managing your financial management and continuously accessing your business’s performance will ensure you’re always in alignment with your business’s long term goals. Always be ready to adapt your strategies by staying proactive as the business grows, markets change and new opportunities become available. As a business owner you don’t have to do everything alone. There are systems and people to lean on that can help strengthen the financial foundation of your business and mitigate risks that will position your business for long-term growth and success.
