Are you planning to start a business? Or do you already operate one but are struggling in managing your cash flow? Starting a business can be easy, but successfully managing it towards growth could be hard. There are many areas you must focus on, like business finance, employee management, and marketing to become profitable.
Entrepreneurship is becoming a global trend. A study by the Center for American Entrepreneurship (CAE) in 2018 showed that U.S. venture capitalists are infusing their money in new businesses abroad. Foreign investors, on the other hand, are investing in startup companies in the U.S.
With these developments, new business owners should improve their management skills to stay in the game.
How to Launch Your Business
Based on data from the Small Business Administration (SBA), there are over 28 million small businesses in the United States. However, more than a third of them go bankrupt in two years while around 50% survive in five years. Here are some tips to successfully start and manage your business.
- Conduct a comprehensive research
- Establish a business plan
- Manage your finances
- Decide on your preferred business structure
- Create a unique business name and register it
- Secure the required permits and licenses
- Select an accounting system
- Determine your location, equipment, and overall setting
- Set up your team
- Make a marketing plan to promote your business
Tips on Business Finance Management
A crucial element of business management is business finance. You should ensure proper control of your funds to maintain your cash flow and generate money for business expansion. Here are a bunch of tips to carry out your day-to-day money management.
1. Ensure sufficiency of your capital– Make sure you have enough money to get through the startup stage of your business. Create a plan based on a projected zero revenue in the first three months and have enough cash for your living and business expenses for the period.
2. Manage your accounting properly– Maintaining accurate data of your income and costs is critical in business. You can employ a qualified bookkeeper or buy a DIY accounting software to do it.
3. Analyze your business expenses– Monitor the daily costs of your business to control them properly. Make the necessary adjustments to boost profitability or avoid unnecessary expenses.
4. Create feasible financial estimates– By creating accurate economic forecasts, you can predict and adequately address future challenges.
5. Practice proactive invoicing– Set a seven-day payment term and issue invoices as soon as possible.
6. Maintain a separate bank account for your business– Having different bank accounts for personal and business finances allows you to monitor costs and measure profitability easily.
7. Frugality is a virtue– Stay frugal even if your business is profitable. Your savings will allow you to survive lean months.
8. Apply for a business loan when necessary– You can seek a loan for a carefully planned business expansion.
9. Avoid premature spending– Avoid spending too much on things like business cards, marketing materials, and inventory if your business is not yet gaining profits.
10. Attend business finance management courses or seminars– Attend seminars to bolster your knowledge. You can also use online resources as a guide.
Successfully managing a business may cost you sleepless nights, especially if your revenues are much lower than anticipated. But with firm resolve, proper financial management, effective marketing plan, and family support, you can survive the challenges and grow your business to new heights.