Small business owners face a lot of challenges in today’s market, some of them financial. Small business owners need to balance the books and plan for the future, and still turn a profit. Here are the top tips to build and maintain a solid foundation for your business’s financial future.
Borrow
A lot of small business owners finance their business with personal savings. This isn’t ideal as needs increase, as most new entrepreneurs will need more capital to fund business growth. Any borrowing you do comes with interest, so choose your loan wisely.
You could consider:
- Business line of credit. This usually has a lower interest rate than a credit card.
- Short term business loans can help with cash flow management, business growth, and unexpected challenges.
- Credit cards, which are more convenient. If you need one, choose a business credit card with a rate that you can manage, and a cashback feature.
Don’t Let Cash Flow Become A Cash Drain
Not all business bank accounts are the same. The fees you pay for deposits and withdrawals can really vary. If you make a lot of transactions, these variations could make a big difference to you. These fees can soon add up. There may also be fees for volumes of cash, coins, and cheques.
Talk to your bank of choice, whether that’s a traditional offline bank or one of the banks on DigitalSupermarket. They can help you find the best account for you. Cash management services provided by a financial institution can often be used to minimize costs and rates whole maximising efficiency. Look for more ways to save by comparing different accounts and choosing the option which will be the least of a drain on your cash. Keep your money where it belongs, instead of spending it on bank fees.
Avoid A Complicated Merchant Account When A Basic One Will Do
Most retail businesses today offer a point of sale payment option, as most customers prefer to make purchases with debit and credit cards, rather than cash. This is useful for cash management and record-keeping. However, make sure that the merchant account that you’re using fits your needs with the services provided and the fees. If your transactions aren’t that high, a volume-based payment plan could save you some money. There are lots of solutions available, all designed to fit your business needs. Do some research and discuss your options with your bank.
Don’t Mix Personal Expenses With Business Expenses
Using a personal credit card seems like a simple way to finance your business and a lot of people do it. However, it’s important to keep your personal and business expenses completely separate. This is why business credit cards exist. Keeping your expenses clearly split will make it much easier when it’s time to pay your taxes as well. It will make record-keeping much easier too. It can help to build up your business’s credit and make it easier to secure other lending later on. Business credit cards also often have great rewards that are aimed at businesses.
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