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Just like individuals draw up a list of New Year’s resolutions to steer their life in a desired direction, the small business owner should jot down resolutions that’ll make for a successful financial year.
But where to start? With the basics, of course. Here are four financial resolutions that you can make for your business every January:
I will draw up a realistic budget
The first step to securing success for your business is setting up a realistic budget – don’t overestimate your income and underestimate your expenses. The risk of running into a financial shortfall becomes a reality with either. It’s much better to adopt a modest approach and update the businesses’ budget on a quarterly basis. Just as important as setting the budget? Sticking to it!
I will manage the cash flow better
You have to stay on top of the business’ cash flow. This means ensuring that you get paid on time and paying your creditors on time. If you’re slack in sending out invoices, the influx of money into your business will be sporadic and slow. Overdue accounts from your side will accrue interest, not only hurting your reputation but also your bank balance. To make it easier to keep track of the cash flow, set up debit orders that will take and make payments on agreed dates. Digicash can take care of this for you and do the necessary reconciliations so that you can concentrate on other aspects of the business.
I will assess all expenses
Business owners tend to focus on big expenses, like advertising efforts, when assessing overheads. But the little expenses, like utilities, often have a great impact on the bottom line and shouldn’t be forgotten. To ascertain where your business is spending too much money, keep track of all expenses for a month. Then use your findings to make adjustments. Doing this at the beginning of the year will kick off business on a good note.
I will reduce my personal spending
To think that your personal spending habits do not influence your business would be wrong. There are many business owners that fall into the trap of living a lavish lifestyle, leading them to dip into the company’s savings to help them get to the end of the month. You’ll be doing your business and employees a great disservice once you start doing this. So, keep your personal expenses under control and you’ll always stay on the right side of your accountant.
Every business is different, so adjust these resolutions to suit your specific business and add to the list to cater for areas of importance in your company. Don’t leave personal business resolutions behind – it’s important to develop yourself as well.
This article was brought to you by Digicash. www.digicash.co.za