37 - Top 6 Money Management Tips for Small Business Owners
Whether you're running a small business as a first-time entrepreneur or as a seasoned veteran, you know by now that money management is one of the keys to success.
The trouble is that knowing something and doing something are two different things. Unless your venture has been running like clockwork for years, it's time to take a refresher course on money management for small business owners:
1. Save Money Wherever You Can
The ways to save money on business expenses are practically endless, and while some strategies are market-specific, here are several quick tips:
Get your office supplies for free after a 100% cash rebate program from major office supply retailers.
Check out Craigslist or Freecycle for office furniture. Also, check to see if your state government sells retired office furniture to the public. You may be able to outfit your whole office for a fraction of the normal cost.
Buy your computer equipment from eBay or Amazon.
Get your office audited by your energy provider to cut energy costs.
Market your business for free through social media.
2. Create and Maintain a Budget
It's tough to manage your money without a budget. Sit down and hammer out your monthly expenses and start balancing your expenses with your revenues. Make adjustments as needed, but make sure you're allocating funds for every major department of your business, setting aside additional money to create a contingency fund for unexpected needs.
3. Consider Hiring A Professional
Money management is important, but it can be tedious. If you hate crunching numbers and staring at spreadsheets, it might be time to hire a professional to manage your money. Contracting with an accountant or an accounts payable clerk will give you peace of mind while also freeing you up to spend time on the tasks you enjoy.
4. Keep Track of Petty Cash
Limit who has access to your petty cash fund and track where that money is going. Petty cash sounds, well, petty, but those expenses add up fast. Create clear guidelines regarding what the petty cash may be used for and eliminate any unnecessary spending.
5. Expand With Caution
Once you start experiencing success, it's easy to assume the next logical step is aggressive expansion. Unfortunately, if you expand too quickly, your business could suffer. Not only does expansion cost money, it also requires time and effort. If you're already stretched thin, start your expansion with caution, taking one small step at a time.
6. Monitor and Improve Cash Flow
If your cash flow is suffering, there are ways to make up the difference until you correct the balance. For instance, you could hold off on paying your bills for a week or two, as long as doing so won't incur a late fee. To boost cash flow, offer your customers a discount for early payment or prepayment of their accounts. Just keep in mind, these strategies should only be put to use as short-term, stop-gap measures. Go back to business as usual as soon as your cash flow regains its health.
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All the best!
Patty Block
