5 Nifty Financial Resources For Small Business Owners
As a small business owner, you’ll know that finances are all-important, and that managing your cash flow is the key to success. Having available funding is also essential, especially if you are looking to grow your venture.
According to a US Small Business Administration Office of Advocacy survey, only 45.4% to 51% of small businesses survive long enough to pass the five year mark. Many of these businesses fail due to financial issues, and what’s doubly sad is that many of these issues could have been avoided.
Fortunately, there are plenty of resources available that can make managing your money and your business so much simpler.
You don’t have to be a statistic.
You just need to know where to look, and what to focus on, to ensure that you operate efficiently and keep your company in the black.
In this article, we look at several great resources that will help you on your entrepreneurial journey.
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1. An All-Inclusive Accounting Package
Proper accounting requires the keeping of meticulous records. You need to account for your incomings and outgoings, and determine your profit based on these figures. It’s therefore essential that you have the correct accounting package in place.
While many small businesses start off using Excel or similar programs, in the long term, a reliable accounting package that’s purpose-built is an essential investment.
A proper online accounting system will help you keep track of your sales, stock, expenses, and invoicing. It will also make accounting simple and streamlined, and if you require the services of an accountant, you’ll cut costs as they’ll have to do less administration work. Plus, you can draw reports that provide a clear overview of your current financial situation.
These reports can also be very useful when you need to submit a tax return, or if you wish to approach a bank or lender for a loan and need to provide clear financial records.
2. The Right People In The Right Positions
You need people who you trust to help you with managing your finances. We’ve heard of so many small business owners who’ve sought the assistance of a tax practitioner, but they haven’t filed the entrepreneur’s taxes properly, leading to fines and penalties being incurred. Or the horror stories about financial planners who advised on investments that tanked soon after.
When choosing your financial team, do your due diligence.
Ask for referrals from people who you trust, who are in the same industry as you, or have a proven track record of success. Ask them how long they have worked with the tax practitioner or financial consultant. See how happy they are with their service. You can’t afford to make a mistake with this one.
3. Trusted Technology For Your Business
While you could also put your accounting system to use here, we’re more referring to technology to help manage inventory.
In retail stores—such as grocers or clothing outlets—a good point-of-sale system (POS) will monitor when certain stock is running low, how popular items are, and what the cost and selling prices are.
The same type of system is extremely useful in restaurants too.
In the corporate world where many client requirements need to be managed, a Content Management System (CMS) can be a game-changer. A CMS can manage web content, run and maintain an intranet, blog, ecommerce or corporate site or blog.
For realtors or any small business dealing with customers and potential customers, a Customer Relationship Management (CRM) system can be implemented. This system manages customer interactions and improves business relationships, making it a very worthwhile resource that can pay for itself in time.
4. A Solid Business Plan & Clean Credit Report
If you approach an investor for funding, the first thing that they’re going to ask for is your business plan. Regardless of whether your business is brand new or established, a plan is an integral resource that outlines your roadmap to success.
A well-executed business plan will include:
- Financial projections
- Profit and loss statements
- Cash flow statements
- Sales forecasts
- Break-even ratio
All of these documents will highlight why you are an attractive option, and an investor will immediately see what kind of ROI they can expect.
Besides your business plan, a clean credit report is crucial. You can include this as an appendix if you’d prefer to keep it separate. Ideally, you should have a copy of both your personal and business credit report on hand, as an investor may want to ensure that there are no red flags on either account.
5. Crowdfunding Platforms
Besides approaching a bank, venture capitalist, or angel investor, there’s also the option of crowdfunding. Business Insider outlined some of the most successful crowdfunding campaigns ever run, and this is proof that this financial resource—although unconventional – works.
Sourcing crowdfunding is as easy as logging onto a platform such as Kickstarter, putting together your campaign, and then sharing it on social media. However, to make sure that people donate to your business, you need to give them a compelling reason to do so.
You may offer a sample of your product, a discount voucher, or the chance to test your service out before your launch, or you may decide that your idea is good enough for people to invest in it without any additional incentive.
In some cases, businesses offer crowdfunder’s monetary compensation when they hit a milestone, which reinforces the feeling of them having invested in you in the first place.
Take Advantage Of Every Available Resource
Understanding and managing your finances is not insurmountable, nor is finding funding to grow or get off the ground. All it takes is a bit of dedication, and the right resources. Whether free or paid for, having the right tools in your arsenal can be the difference between failure and success.
Use these nifty resources as inspiration and get your businesses financial standing on a firm footing that lasts.
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