If you ask any successful small-business owner about their success story, good money management techniques will most likely come up during the conversation. Even if you’re not a financial expert, employing a few simple strategies can help you manage your finances like a boss.
Learn the basics
As a small-business owner you need to be everything to everyone, from HR and client services to manager and (most importantly) financial expert. Even if you employ a dedicated accountant or bookkeeper, it’s important to have a basic understanding of how your money moves around in your business. So, sign up for a free online accounting course or introductory module at your local college.
Open a business account
Using your own money to fund your small business seems logical, and most small-business owners make the mistake – yes, mistake – of dipping into their personal account to fund essential purchases. By mixing business and personal finances, you’re essentially making both entities liable for the other’s financial mistakes or legal mishaps. Therefore having a separate business account is crucial to keeping your affairs in order.
Pay on time
Especially in the world of SMMEs every cent counts, and even the smallest penalty can be the difference between success and failure. Set monthly payment reminders for yourself and do the necessary projections to ensure that you have enough funds available to pay your vendors and bills on time, every time.
Select the right account
Choosing a bank account is largely the same as choosing a vehicle or premises for your business: You need one that speaks to your needs at the most reasonable price. Start by weighing up the perks of the bank account with the interest rates and banking charges. A Nedbank business account, for instance, can give you access to a dedicated banker and electronic self-service channel so that you can manage your cashflow daily.
Insurance is often difficult to justify on a small-business budget. But disaster often strikes without warning and having no insurance could mean, ‘Bye-bye, business.’ Be smart when shopping around for cover and get at least three quotes from various providers. In many cases insurers will adjust their quotes to match those of their competitors, and you can even request customised quotes that cover only the crucial elements your business.