It is so essential to keep your eye on how much you’re spending and knowing where your money is going as a young business owner. After all you do not have access to large pools of funding. Which means you need to always be in control of your monies. And always try to have a snapshot of how you are doing money-wise.
Many starter or small business owners do not know how vital cash flow is to their survival — and how to manage their money. And that the overall goal should be to have more money coming in than going out to pay for stock or services.
Some things come up on a regular basis. Such as your utilities, rent, transport, internet and payments to suppliers, packaging, paying someone to do the deliveries for you, web designers. Etc. Sometimes all this can be overwhelming.
So it helps:
1. To review some expenses so you can reduce any of these payments.
2. Check what’s in your pipeline and your list to make sure no one is falling behind on their payments.
3. To have a process that you use to follow-up with late payers to collect what they owe you.
4. Shop around for the best deals.
5. Negotiate with your suppliers and ask for better terms, extended pay-by dates and early payment discounts.
6. Before you pay an invoice, to check that the amount paid matches that on the invoice and that the products or services you’re paying for have been received.
7. Regularly check and update your records and keep an eye on your accounts. So nothing gets overlooked.
8. Set spending limits for some good and services.
9. Set payment terms at the beginning of a relationship with another business. And if you will offer early payment discounts? While that may incentivize your clients to pay you sooner, it will bring in less cash. Only you can decide if that trade-off is worth it.
10. Before you enter into any business arrangement; check out the person or company you’re considering doing business with. Check their history. Ask around or consider doing a background check.
The bottom line is as a small business owner you have a lot to watch out for and do. Hopefully, you will have things under control so that your time is better spent developing ideas and on sales and marketing.