Without doubt, many entrepreneurs agree running a business is no easy feat.
While many aspects are considered challenging, most find the finance part (working with spreadsheets, ledgers, and numbers) especially demanding.
However, understanding and implementing robust financial management techniques can significantly contribute to the company’s long-term success.
Get your venture off to a good start by keeping in mind the following beneficial financial hacks:
Invest in the services of trusted professionals
While saving money is important in any business venture, knowing when not to skimp is equally as crucial.
For instance, when in need of additional funding, investing in the services of a seasoned business loan consultant should be considered a must.
While cliché, the adage “time is money” will always hold true especially in the business world.
So rather than going about the whole process on your own (and wasting precious time, especially for first timers), delegating the job to a business loan consultant will help expedite the process and ensure things are done right the first time around.
Apart from convenient, fast, and fuss-free processing, a business loan consultant can also help warrant you get the best deal possible. Now, that’s a deal you can’t afford to miss out on.
Ensure you have sufficient capital
Undoubtedly, starting any venture (and fueling its growth) is impossible without capital.
Unfortunately, when preparing a financial forecast, many entrepreneurs commit the mistake of projecting an optimistic revenue growth but underestimating early stage expenses. As a result, the capital requirement forecast becomes too low.
To prevent the above mentioned scenario from occurring, adding at least 10 percent more to the original projected capital is recommended.
This strategy will help ensure you avoid critical capital shortfalls that might hinder the smooth sailing flow of your venture.
Make sure receivables are promptly collected
While many believe otherwise, revenues are only a part of the whole financial picture.
That being said, your focus should not be on earning profits alone.
If you see healthy profits but have trouble paying your bills, the problem can likely be attributed to your ability to collect your receivables on time. If customers do not pay their dues on time, your cash position will end up getting compromised.
Make accounts-receivable management a priority so you don’t end up scrambling for cash just to maintain your day-to-day operations.
Make planning a priority
While often viewed as time-consuming, planning is a technical process that can benefit any business.
Understanding the competitors’ weaknesses and strengths, knowing your market’s potential and providing products and services customers need and would pay for are just some of the fundamentals of planning.
In addition, planning can help the business use its resources efficiently and help ensure little is wasted in terms of time and money.
Examine the impact of your expenditures
Make it a priority to look into any expenditures you’ve made (especially the major ones) on a consistent basis.
Examining the impact of your expenditures can help you easily identify if it has helped improve customer service, contributed to the generation of additional sales, or if it has improved the quality of the products and services you are offering.
Conduct an annual vendors review
Once a long-term relationship with vendors has been established, there is a tendency to also overlook the annual cost increases they might implement.
In line with this, even if you already have a good business relationship with your vendors, do not forego doing annual reviews.
Conducting a review will help you gauge if you need to look for other alternatives that are as efficient but will cost less.