Starting a business can be scary and thrilling; keeping it running is even more daunting. Perhaps running a company is all brand new, and now that you’ve got the business created, you may be asking, what comes next?
Having a good view of your funds will help you know your next step. Financial planning for small business owners can be intimidating. If you haven’t begun your financial plan yet, don’t worry. Below are a few essentials you should know to include.
Set Your Goals
Before anything else, you need to know what you expect from your business. Goals will help you get there. Understanding your customer base, how your product will suit their needs, and how you plan to get it to your customers will be huge in helping you plan the next step.
Before digging into the other tips, sit down and plan out why you have your business and how you can serve your clients.
Know Your Funds
Now that you know what you want and have goals in place, pause and take inventory of your business bank account. How much debt do you owe, and what assets do you have? You don’t want to be making financial decisions in the dark. To keep an updated look at your income, don’t forget to include a balance sheet.
A balance sheet will give you an uncomplicated view of your equity and any liabilities. It will help you know exactly where you stand at the current moment and how to move forward. If you’re struggling with the numbers, call a financial advisor for help.
Think About Cash Flow
Running a business without knowing where the funds come from is difficult. Does your company have reoccurring customers or guaranteed monthly sales? Can you count on money coming in each month from reoccurring sales? It is essential to understand what money is coming in. A cash flow statement will keep you on track with your funds and will help you know what to expect and project for the coming month.
Not only will your cash flow statement help you keep track of the money coming in, but it will also help you plan for those unexpected things that are sure to happen when first starting a business. Having a line of credit or business savings comes in handy for emergencies.
Don’t risk your new business by not being prepared for the unexpected. Sometimes no matter how much you plan, something happens. Whether you experience emergencies with the storefront, equipment needs, or additional expenses, it’s good to have the capital available and ready.
These items are key to include in your financial plan. Remember, starting with goals will help you achieve where you want the business to go. Having your finances in order will help you make sure you can make it happen.