This installment of my business start-up series covers one very important part of business ownership – finances. As a business owner, or someone contemplating starting a business, having a solid process for creating, tracking and analyzing your budget is extremely important; it’s impossible to be profitable over the long-term if your business finances aren’t always on your mind.
I’ve written quite a bit about business budgets and managing your finances, so here is a rundown of some posts to help you make sure all of your ducks are in a row when it comes to money.
Creating a Budget
The idea of a business budget can be overwhelming, but without knowing where your money is coming from and where you are spending the most, you may be losing big opportunities to increase your profit. Creating and maintaining a budget for your business on a regular basis can help you track expenses, analyze your income, and anticipate future financial needs.
A big financial item on your mind is probably how much you can charge for your services. There are a number of ways you can determine your rate, including using a rate calculator or formula, and conducting industry research. Then over time, you need to consider raising your rates to reflect your increased experience and the rising costs of doing business. Your rates can set the stage for the success or failure of your business, so be sure to set aside the necessary time to do this process justice.
Getting paid can be one of the most rewarding parts of business ownership. You can make the entire process easier by having a set invoicing process, using an easy-to-manage invoicing app, and determining in advance how you will accept payment. Plus, once you go into business, you will need to think about how you will handle clients who do not pay on time or at all for the work that you do.
The less you spend, the more your business will net, so you obviously want to keep your business expenses as low as possible. Your business budget will help you identify areas where you are spending more than you’d like, and then you need to develop a plan to cut back. There are a lot of ways you can save money, including using online marketing, moving to open-source software, and taking advantage of online training for skill advancement.
Managing your budget and finances may not be the most exciting part of running a business, but it could potentially be the most important. Do you have any tips for managing business finances to share?
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