Planning in advance for your business finances will take the weight off your shoulders. Financial planning will also direct management and create security in your business for years to come. It will take a lot of adjustment in your personal and business budgeting. The most important thing here is that you balance expenses and costs, while saving up for the rainy days.
Here’s a general plan that you can follow through in managing your finances.
1. Take a Look at Your Personal and Business Finances
It’s recommended that you separate your personal and business bank accounts. It also goes the same with your personal and business financial goals.
There are times when your personal finances may overlap with your business, and vice versa. The problem with this is that you might compromise your funds for personal expenses, children’s education, or retirement in favour of growing your business. Don’t scale up your business in such a way that you will have no savings for the future. Create a budget for your personal needs and business operations. Allocate different bank accounts for those two areas.
2. Consider Other Financing Options for Your Business
Securing funds is one of the biggest hurdles in running a business. Most entrepreneurs would turn to their savings, credit cards, family or friends for additional financial support. Financial advisors would usually urge business owners to seek out funding such as loans and other financing solutions to withstand any challenge in business.
If you want to take out the hurdle in researching what are the financial options available for you, check out our loan comparison tool here at Bizzloans. We’ll match you with the right solution for your business needs.
3. Push For More Revenue
It’s essential that you track and analyse all of your business expenses, while ensuring that the business can generate enough revenue. It may take some time before you hit ROI, but you’ve got to make sure that the business is profitable for it to be sustainable in the long run. Set aside a part of your profits for the future growth of your business. Ensure that you reach your target sales every month, and anything extra can be re-invested to your company.
To know more about how you can boost your business cash flow, check out the following guides:
How to Improve Business Cash Flow
11 Practical Ways to Generate More B2B Sales Leads
9 Cash Flow Mistakes to Avoid in Your Business
4. Manage Your Taxes
Your business’s tax requirements will depend on your organisational structure. It’s well recommended that you take advantage of accounting software such as Xero or MYOB to help manage your finances. You can also consult with an accountant or tax attorney to ensure that you are not missing anything regarding the specific financial concerns of your business.
5. Don’t Forget to Plan for Retirement
Go for a company retirement plan to align your personal and business financial planning. It will include an optimum contribution rate and company matching that will maintain employee loyalty. For every profit that your business earns, you should always set aside something for you and your employees’ future.
6. Estate Planning and Business Succession Plan
Estate Planning involves creating a will and family trust for personal and business assets to be properly managed in the event of a person’s death. Seek out legal counsel on how you should leave your assets to family or relatives. Properly allocating your assets to your loved ones will help them in case you won’t be able to provide for them anymore.
A Business Succession Plan also comes when you have to leave your position within the company. A succession plan will allow a smooth transition of leadership. It can also address a lot of financial and tax matters that would go along with it.
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