5 Tips for Business Money Management
– This article was last updated on 19 July 2021-
A solid money management strategy including budgeting, day-to-day expense management, loans and investment is crucial for any business. We have compiled our five tips for new businesses as they seek to establish themselves.
1. Know your Running Costs
How much money do you need to stay in business? What are the reoccurring expenses each month? Rent, utilities and other such expenses are easy to budget for, so be sure to withdraw that amount of money from the business income each month. Plan ahead and try to cover such costs early.
2. Invest Back in the Company
Resist the urge to blow any early wins and invest earnings back in the company instead. Perhaps you need more efficient tools or a new employee to keep up with orders; invest for long-term success.
3. Be Conservative with Hiring of New Full-Time Staff
People are an essential resource but they come at a high cost. When times are hectic and you feel you are stretching yourself thin it’s tempting to hire new staff, but be very conservative and make sure it’s absolutely necessary. Consider hiring part-time assistance for a while, and make sure that everyone is working as efficiently as they can before going for long-term hires.
4. Track all Expenses
Even if it’s not a large one, several small purchases can easily combine into significant sums. Use expense management software to simplify the process.
5. Be Smart with Credit
Let’s say you budget for a loan of £100,000 for next year don’t loan that amount all at once. To avoid paying excessive interest it’s better to take loans as you need them. Get the loan pre-approved from the bank and loan whatever amount you need right now. Minimise the cost of the credit and save in the long run.
Getting your money management strategy right is essential to any business that wants to achieve long-lasting success, so attempt to lay the foundations for good money practice from the start.