Money Smarts For The New Business Owner
Know All Your Financing Options
If you are in need of any sort of financing some point down the line, it is important you know all your options. Don’t assume you can just go to the bank and get a loan. Financial institutions have tightened lending requirements, and you can’t bank on getting a loan. There are other avenues to explore, and it is good to know about them now—don’t wait until you are in a bind to start your research. Some examples include order financing if you don’t have the cash to fill a large purchase order, invoice factoring to get paid right away, instead of waiting for your customer to send payment and merchant cash advances.
Consider the Necessity of Each Expenditure Very Carefully
Yeah, you need to spend money to make money, but sometimes new business owners don’t take the time to carefully consider each purchase—lots of things that seem ‘necessary’ are anything but. You want to keep costs down as much as possible when you are first starting out. Sure, you will need employees at some point, but would freelancers fit the bill for the moment? Do you really need that office space right now, or can you still get away with working at home? Should you buy that equipment outright, or would it be smart to lease for the time being? Before you move on anything, take a moment to think whether it is absolutely essential to the business in this very moment.
Get Your Personal Financial House in Order
Whether you are paying yourself already, or tending to personal financial responsibilities with your seed money, it is important you get things in order for the health of your business. It is probably a good idea to pare things down a bit if you haven’t already—you don’t have to like you’re destitute, but you should try and save as much money as possible so you can put as much back into your business as you can. Figure out your expenses, and see what is the least amount of money you can live on.
Set Clear Goals
Without clearly defined goals for the progression of your business, it is easy to spend money inefficiently and ineffectively. Set both long and short-term goals for your business. Set clear markers to help you determine if you are on track, or if things need a bit of tweaking. This will create order in your mind, and in your day-to-day activities.