6 Finance Tips All Business Owners Should Follow

6 Finance Tips All Business Owners Should Follow
6 Finance Tips All Business Owners Should Follow

It’s a gross generalization but, by and large, business people are drawn to the business field because they like launching big ideas, solving tough problems and taking big risks, not filling out budgets and doing mind-numbing number crunching. That’s a good thing — we need big-picture thinking to get things done. Unfortunately, much of running a business is sweating the small stuff. Staring at ledgers, managing people and handling mundane tasks are essential to bringing any vision to fruition. Here are 6 tips you can follow to make sure they don’t drag you down.

1.Never Put Things Off

It’s tempting to put bookkeeping tasks at the bottom of the list in terms of importance to the business. After all, it’s a major chore. Here’s the problem: bookkeeping never goes away. If you neglect it, it just grows bigger and more formidable. Make it a habit to tackle small bookkeeping tasks every single day or at least a few times a week. Staying on top of it will make it more manageable and make you more knowledgeable about how your money is coming and going.

2.Know Your Strengths and Weaknesses

This is a hard one because it means analyzing and being critical with yourself. You don’t have to beat yourself up, but if you know that managing payroll isn’t your strength (employees will let you know this particular shortcoming with surprising quickness), it’s worth putting someone in charge of it. It might take a chunk out of profits, but if it ensures employees are happy and you get to keep your sanity, it’s money well spent. This goes for everything.

How do you know if it’s a weakness? If one thing keeps falling by the wayside, going off poorly or you’re working too many hours on it, get out of the way of your ego and admit it’s not your strong suit.

Conversely, knowing your strengths will keep you focused on what you do well and hopefully keep you working on what excites you about running a business.

3. Know Your Team

Just like you, every member of your team has strengths and weaknesses; understanding them is the key to success. To use a basketball analogy, you don’t want your 7-footer exclusively taking 3-pointers or your small guard posting up centers in the paint. That’s a recipe for disaster.

Who’s amazing at customer service on your team? Who thrives in the boardroom? Which person is the glue that holds the office together? If you don’t know, spend some serious time getting to know your staff. This may seem like an obvious point, but it’s an area where businesses fail all the time (and the reason for the entire field of organizational psychology).

4. Avoid Being Penny Wise and Pound Foolish

The Brazilians have a common expression — “barato se torna caro” or, “cheap can be expensive.” This idiom has a great application in the business world.

Many business managers try to pinch pennies in the wrong places, hiring the cheapest workers, cutting a corner on product quality or not investing in a viable workspace. In the moment, these actions might save the bottom line but down the road, they can become incredibly expensive mistakes. Knowing when to spend and when to save is one of the linchpins of good business sense.

5. Pack a Map

While it’s true that not every single business in the world needs a business plan (most do), every business should have a map to guide their progression. Maintaining the status quo is a great shortcut to an “everything must go” firesale.

How do you avoid stagnation? Make a progression roadmap with clear, definable, achievable goals. How will you grow? How will you weather a slow season? Where would you like your business to be in three months? One year? Five years? It’s okay if you have to go back and adapt this plan to new circumstances, but just make sure you don’t neglect it entirely.

6. Embrace the Wheeling and Dealing

Business is built on relationships and sometimes that means picking up the phone or paying a fellow business owner a visit. These connections can pay off in unexpected ways. For instance, if you’re tight on funds and can’t pay for a particular supply this month, you might ask for a discount or offer a service to a business acquaintance as a quid pro quo. It might not always work but you might be shocked at how often it does.

Even with a degree in finance, keeping the finances of a business on track is no easy task. That’s because there’s no set guidebook or list of rules that work in every case. That’s alright because with a heaping helping of passion, a good amount of attention to detail and some financial savvy, you’ll be able to navigate to success.

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