A daily habit that will propel you to success is learning to manage your business money. This isn’t really about investing. Although you should definitely set up regular investments and plan for your future. This is more about the idea that you should always know what’s coming in and what’s going out (and from and to whom) any moment of any given day. This is your called your cashflow.
Many businesses face cash flow problems at some time or another.
They will often say that it’s either raining money or it’s a drought. When a new business starts, it’s hard to know when and how the money will flow, and if it’ll slow down during certain times of the year or remain steady. No matter what type of business you have, if you manage your business money more efficiently you can fix your financial problems with a little bit of thought and planning.
FREE Checklist: 12 Ways To Make More Money In Your Business
How To Manage Your Business Money
Starting and running a business is expensive. You need capital, investments, and revenue to get you through the tough times. Budgeting is an important skill to learn for a household but also for business.
When you manage your business money correctly, you’ll know what you have coming in and going out and it’s a lot easier to make judgment calls when opportunity knocks. Paying close attention every day to your expenditures and keeping track of your income and savings as you plan for your future will ensure your success in the future.
1. Develop Plans for Your Money
What you do today with your money has everything to do with the plans you’ve created for the money you have. If you’re not planning for big expenditures, you may overspend, or you might even miss opportunities that you would have taken otherwise.
2. Track Your Spending
Even if you spend a buck on a candy bar at the checkout, you need to track what you spend your money on. If you make it a habit to track every single day, it makes it easier than having to do data entry later after the fact. Use apps to help you automatically track your spending.
3. Track Your Income
It’s also important to track what is coming in on a daily basis. Don’t worry. This is not hard if you’re using a good online bank that offers the ability to categorize your income as it comes in. When you get into the habit of glancing at the results once a day to stay up to date, it becomes easy.
4. Know Your Income Streams
Most wealthy people have about 7 income streams on average. Knowing how each of your streams is working out, whether investments or something else daily, is imperative. What you track grows.
5. Create a Realistic Monthly Budget
If you’re having issues sticking to your plans, redo your budget. If it’s not realistic, you won’t stick to it. Make your budget work for you by using real numbers and deciding what to do based on reality. Remember your marketing, when planned correctly, should deliver you a return on investment that makes it worth doing. In this way, you can take your business to the next level.
6. Pay Your Bills on Time Every Time
Paying your bills late accounts for billions in income to corporations that charge these fees. Don’t give them more of your hard-earned money for nothing. Instead, set up automatic payments and then double-check by using text alerts when the money comes out of your account so you don’t ever miss a payment.
7. Kept Your Debts Reasonable
The fewer payments you need to make, the less work you’ll have to do keeping track. Business debt has a place, but wherever possible it should be kept to a minimum and be used to buy appreciating assets (assets that increase in value as you own them) over depreciating assets (an asset that has a limited effective life and can reasonably be expected to decline in value over the time).
8. Track and Manage Recurring Payments
Everyone has recurring payments set up these days, but it’s important to be mindful of them and not just ignore the money coming out. Pay attention to it coming out of your account so you can check whether you really need that item or not based on how you feel about the payment in comparison to the value you receive.
9. Save For Emergencies
Having fast cash available in case of an emergency, whether something vital has broken down or there’s an exciting opportunity, is a great way to cut down on decision paralysis. Try to have at least 6 to 9 months of emergency money available in cash at all times.
Free Checklist: 12 Ideas For Making More Money In Your Business
Every business owner wants their income to feel secure and stable. One of the most common business problems today is that many entrepreneurs and business owners hit income plateaus. But there are ways to push beyond them. One extra stream of income might not add up to much, but if you set up more than one income stream, it can become a river of revenue. Download my free report, 12 Ideas For Making More Money In Your Business and use it to help grow your business to work less and make more money.
