Understanding how different areas impact your business financially is important to you as the owner of your business.
If you’ve been running your small business for more than a week, you’ve discovered that there are many responsibilities of managing your business. From finance to hiring employees, with each area of management requiring you to be pro-active and knowledgeable in the life of your small business.
At the end of the day, or year, you may find that you’ve missed critical steps in the management of your small business that will have a negative financial impact if left unattended.
Here are 7 key areas that have a financial impact on your business.
1. Manage your finances.
Your finances are the foundation of your business.
Understanding your revenue in and your expenses out is critical to making decisions for your business. You don’t need to be a bookkeeper, but you do need to have your bookkeeping up to date. When your books are in order, you gain insights into which products or services are profitable or not. Investing in new equipment or inventory is based on your profitability.
Maintain proper bookkeeping to manage your finances and make better decisions for the growth of your business.
2. Buy Assets
Enjoy the tax advantage of buying assets.
Before buying any equipment for your business, have a clear plan and purpose for your purchase. How will this equipment increase your profitability and save you money? Will it be easy to maintain and repair versus the need to purchase new equipment in a few years? Would there be cost savings if you leased the equipment rather than purchasing it?
Take time and determine how this asset purchase will affect your small business finances over the life of the asset.
3. Pay your taxes.
Never get behind in paying your taxes.
Your small business is liable for multiple taxes, and it is important that all your taxes are paid and paid on time. Understand which taxes your business is liable for and set up a system to stay compliant with federal, state, and local liabilities.
When handling your small business financial reporting yourself, make a calendar of tax liability due dates to avoid paying and filing late.
4. Develop a Marketing Plan.
Part of your business plan should include a marketing plan.
Who are your ideal customers? How will you market your products or services to them? How are you better than your competitors? Set marketing and sales goals and break these goals down into actionable daily / weekly steps. Does your budget include paid advertising? How will you receive payments? Develop a customer service plan.
Each of these points are critical to the success of your small business management.
5. Stay legal.
Your small business must be legally compliant to avoid legal troubles later.
Your state and local districts may have special legal regulations to operate your business. An online business website is required to have legal disclaimers available for visitors to your site.
Research your legal responsibilities and get your small business protected.
6. Stay Cyber Secure.
Threats exist for all types of businesses from cybercriminals.
You may not believe you are at risk, but size does not matter. Opening an email with malware attached can put you out of business for days or forever. Research IT services that provide security for small businesses.
Take time to protect your business with these steps:
- Train yourself and your employees in basic cyber security measures. What is your policy for emails and downloads? Take steps to protect your business with training.
- Use firewalls and secure your internet connection.
- Each computer should have good antivirus software installed.
- Back up sensitive data regularly from each computer.
Do not skip this step, regardless of whether you have an online business or not.
7. Prepare for emergencies and/or disasters.
Manmade or natural, you may encounter an emergency and/or a disaster with your business.
Take time to analyze which types of emergencies and/or disasters are most likely to be a threat to your business. Develop a plan to help you return to operating your business as quickly as possible.
Speak with your small business insurance agent to purchase the disaster coverage you will need to help you quickly recover.
Managing your small business is a day-to-day process that requires you to be ready for whatever the day may hold. No matter how small your business, implement good management practices now.
Keep your business compliant and safe as you continue to grow. A good plan is to review these steps annually and adjust as needed.
Operating your small business can be overwhelming at times, especially with all the many hats you wear. Contact me to schedule your complimentary no-obligation discussion about your small business management needs today.