I’m not breaking any new ground when I tell you that money is going to drive the vast majority of your entrepreneurial decisions. It’s surely one of the main reasons (hopefully not the only one, however) that you started your own business, and the way businesses rise and fall generally prove the many cliches about using and losing it correct. In the end, it’s not everything, but without it, your business is nothing.
As your company grows, there will be plenty of temptation to throw your money around. That comes from a place of comfort and satisfaction, two emotions that you should be feeling once your business becomes successful. However, minding your money is about more than just checking your balances when invoices come due. It’s a never-ending process, and smart management of your money is a key attribute for sustaining entrepreneurial success. It’s the two-pronged mission that sustains every business: managing what you have, and making sure you’re not letting it fall through any cracks.
Accounting is likely going to take up a healthy chunk of your time, at least until you can afford to hire someone to do it for you. While it can be frustrating and tedious, remember that knowing the financial ins and outs of your business will always be part of your job, no matter how big you get. At the very least, the time you spend keeping your books in order will prove to be a valuable experience as you expand. It’s hard to fall prey to embezzlers and wrongdoers when nobody knows your accounting better than you do.
Outside of keeping your books in order, there are simple ways to stay on top of your funds. Start by being mindful of draining expenses, ones that can easily be taken for granted but when eliminated, have added benefits besides just the cash saved.
One easy money management move that small businesses can start immediately is the use of energy-efficient appliances and practices. Shutting off your computers overnight saves around $30 per unit per year, with the long-term benefit of preserving the long-term health of the machines. It might not sound like much, but staying energy-conscious in this and other ways encourages an atmosphere of fiscal intelligence throughout your whole organization.
There’s also a great deal to be said about dealing with money issues proactively, before they start hurting your bottom line. There are many ways to prevent damaging losses before they happen.
For example, the hiring process is one area where a little extra work goes a long way financially. Especially in a dynamic small business, it often amounts to filling empty seats and hoping training and your own expertise can fill in any gaps. In execution, it doesn’t always work out that way. Making sure that you’re hiring the right person means taking extra care, which might seem difficult. Tough as it may be, it pays off when you get a candidate who creates value, rather than one that you’ll need to replace before long, meaning starting all over again from scratch.
While it’s true that you need to spend money to make money, that’s not a scalable initiative. Managing your money wisely as you grow sounds like an obvious task, but too many young businesses outspend their earnings and end up paying dearly for it.
This is, of course, just a couple small scrapes of the surface when it comes to ways you can keep your money in order and prevent wasteful spending. Never forget that your money is the lifeblood of your business: when it runs out, you’re done for. But that doesn’t mean it’s a staid, sterile matter for drab accountants. On the contrary, it’s an opportunity to improve your business with outside-the-box thinking. When you start to look at fiscal responsibility as another creative outlet, you’ll find it a doubly rewarding use of your time.