Establish Smart Fiscal Moves
Many have the ability to start up and run a successful business, whether it’s from lessons learned in previous work places or through higher education and training on specific small business practices, something many overlook is how to be more efficient on the money side. Maybe you’re really good at tracking expenses and keeping profits in the black, but you may also be giving up some potential profits or losing a little here and there and don’t even know it. To make sure you’re doing the absolute best decisions as far as your money and small business goes, learning to make smarter fiscal moves can always be worth your investment of both time and efforts.
First off, inventory. Learn to more efficiently manage your inventory. Yes, it’s vital to always have the product your customers need on the shelf. If you don’t have it, they’ll order it somewhere else that does. But that doesn’t mean you need to have an endless stock. If your sales on one specific item average say 5 per month, there shouldn’t be real reason to have your cash flow tied up in 100 of those items in stock. Usually it’s safe to keep a 3-month supply in-stock, but obviously that can depend greatly on how quickly stock can be replaced as it gets low. Get better at knowing what is selling and what isn’t. Try and rid yourself of whatever dead stock and non-moving inventory you can, this can help tie up cash flow you can invest somewhere else in your business.
Keep your bill collection practices current. Getting back to that whole cash flow thing, making sure your customers pay their invoices in a timely manner will help you keep moving forward more efficiently. Should you have a customer that needs to pay you, make sure you have various options for them to do so. Credit card, cash, checks, PayPal, apple pay? Which is the most cost effective for you, the retailer to accept and which are the most popular forms your clientele will use? Obviously cash transactions are easiest to deal with day to day, but cash does make tracking your income over the long run more difficult. Cash creates extra steps in recording and accounting that isn’t always the best way. Checks help with streamlining some of that effort, but remember checks can bounce, which can create more work and time spent for you. Credit and debit cards are most common, but bring in extra fees, so be diligent and find what works best for you.
Banks usually offer many options for small business owners, maybe take some time speaking with a few local to you and put them to work, working for you. Many bank institutions offers accounts with low fees or discounted rates on business loans, free direct deposit options, all of which can help you take your dollar as far as it can go. Working capital is crucial in growing your small business, so take some time to find the best route to develop that capital. Maybe a competing bank is offering a lower interest rate on a small business loan, it’s quite possible your current bank will match it, you never know until you ask.
While on the subject of working capital, do your homework here. Make sure you think of everything expense related to getting your small business kick started. Operating expenses, production expenses, payroll, marketing costs, etc.… Having enough capital to keep things rolling until the business takes off and can carry itself at some point will be key to getting you through some of the growing pains. Just be smart about it, don’t get in too deep too quick.
Lastly, maybe you aren’t the top notch accountant your own business really needs. Sure you can run and balance books on a day to day basis. But there is a lot more knowledge needed to make sure your business practices are making you every dollar possible. Should you consider hiring a financial advisor? This doesn’t always mean you need to hire a full time accountant for your business, but having someone that specializes in this kind of stuff can be of great benefit. You’ve been sufficient at handling inventory and cash flow, so maybe you just need a CPA when it’s tax time. But the right accountant can also help you find areas where the business isn’t as profitable and get you focusing more on higher margin areas of the business.