Good financial management is essential for any enterprise to grow and flourish. Small business owners like Nathaniel Mell know that even the tiniest financial decisions can make or break a business. Below, Mell, the CEO of Philadelphia based Felt+Fat, provides five financial tips that small business owners may find helpful during their financial planning process.
Keep a Budget
No matter what type of business you are running, budgeting is crucial. Successful business owners develop annual budgets to keep track of the long-term success of their companies.
Effective budgeting allows you to make calculated decisions ahead of time. If you are hoping to expand your business, knowing the state of your long-term finances is critical.
In addition to developing a budget, it is crucial to re-evaluate your financial choices periodically. When you can track your business’s revenue stream trends, you can more easily make your money work for you.
Running a business involves a wide range of paperwork and planning. Considering the many things you need to remember as a business owner, it is easy to forget payment due dates.
Even if you remember to pay your invoices (punctually), making manual payments wastes valuable time. To use your time more efficiently, automate your business’s payments. Most online banking platforms will allow you to schedule payments. That way, you can reallocate the time you save to more meaningful projects.
Automating your payments will save you time and spare you money spent on late fees.
Keeping paper records needlessly takes up space in your business or home. Paper bills, invoices, and balance sheets are tricky to navigate when you need to find information.
With modern digital platforms, you can easily make your business paper-free. Keeping digital records saves space. You can also organize and back up all your essential documents and records.
Having organized digital records will also make tax filing much easier when the time comes. Becoming a paper-free business has never been more accessible or more helpful than it is today.
Protect Yourself Against Fraud
Since cyber theft and fraud activity levels are at an all-time high, modern businesses need to devote some of their resources to cybersecurity.
Take the time to learn about the potential risks that come with the digital platforms you use. For instance, it is vital to keep your anti-virus and malware protection software updated.
Beyond digital security software, you should also take time to educate employees and associates about common cyber-crime tactics. Some examples are:
- Business email compromise
- Distributed denial-of-service (DDoS) attacks
It is essential to educate yourself and those in your business about preventing these types of cyber-attacks.
Look Toward the Future
Those who own businesses, especially restaurants, should always be looking ahead. Even if your business is doing great today, it could be better (or worse) tomorrow.
It is vital to have clear plans for your financial future. Perhaps you want to expand, or maybe you just want to be prepared for crises that might occur. Either way, looking toward the future is imperative.
Build a cash flow forecast for your business. Regularly examine market trends to forecast how your business will perform in the coming months and years.
Taking a long view of the performance of your business will help you prepare for any problems or opportunities that come along.
About Nathaniel Mell
Nathaniel Mell is the founder and CEO of Felt+Fat, a ceramic design and manufacturing studio serving both professional and at-home chefs. Nate Mell started his Philadelphia-based company in 2014 after graduating from the Tyler School of Art at Temple University and working at the world-renowned Philadelphia Clay Studio.