Small Business Tips: Managing Finances

As a small business owner, you’re probably familiar with the feast-or-famine ups and downs that come with being the boss. Not everyone is cut out for a high stress -albeit extremely rewarding- career that requires savvy money management strategies. Besides the obvious step of making sure your business has a solid Indianapolis Business Insurance policy (so you’re not financially devastated by unexpected, expensive weather or man-made disasters), here are some other tips to keep your finances on track.

Create a Budget and Stick to It

There are some expenses you know you will have each month (typically these include such things as payroll, rent, inventory, and insurance.) Budgeting involves knowing your expenses and knowing how much money you must make to a) pay these fixed expenses, b) break even, and c) turn a profit. According to the nonprofit Info Entrepreneurs, budgeting improves small business owners’ clarity and focus, and increases confidence. Know your numbers and use them to juggle needs versus wants.

Invest for the Future Rather than Spend for Now

With a budget set, you’ll know how much money you have to work with. Make this money work for you by only using it on things or services that will benefit your business in the long run. If you are contemplating a purchase, ask yourself this question: “will it provide tangible benefits to my business over the long run?” If you can’t honestly answer “yes,” walk away and save your money for a smarter expenditure.

Cut the Fat

It’s easy to fall into “autopilot” mode and carry variable expenses forward from month to month just because you’ve “always done it this way.” Occasionally, audit your practices and ask yourself if there are things you can eliminate or do more cost effectively. Every business’ answers will vary, but ask yourself such questions as, “Do we really need a land line?” “Can we do away with the monthly bottled water service?” “Can we avoid the expense of traveling for meetings by meeting online via Skype?” When you evaluate what you’ve always done with fresh eyes, you’ll probably be shocked by how much money you’re paying that you don’t need to be paying.

Business insurance is a nonnegotiable fixed expense – you have to have it!  Walker & Associates Insurance offers competitive policies with small business’s bottom lines in mind. Call us today at (888) 760-7292 for a free quote.