While many small business owners may feel that their businesses are financially healthy, not every business owner possesses the same confidence. Running a check-up on your small business’s finances can give you a better idea of the state of your business, while potentially uncovering opportunities for growth.
How do you feel about the state of your small business’s financial health? A recent study found that about 76% of U.S. small business owners would describe their business as being in good to excellent financial health from 2010 to 2016. Feeling confident in your business’s finances is great and can push you toward further success, but not every entrepreneur possesses this same self-confidence in their daily business practices.
While some entrepreneurs may not feel as confident about their financial health, almost all have a firm belief in their idea; otherwise, they would not have invested in their dream. Now is the time to nurture your investment and take a good look at the health and wellbeing of your business’s finances. Entrepreneur recently offered some tips for small business owners looking to assess their business’s financial health:
- Take the financial pulse of your business. How much money is flowing in and out of your business? Where is the money coming from? Remaining vigilant about the flow of your cash can help you to strive for growth. Doing this on your own through financing software is definitely a possibility, but it is a much smarter and safer bet to hire a financial professional.
- Trim down your expenses. Easy fix, right? Just spend less than what you are earning? Or take measures to boost sales to counteract the spending? You will also want to work with your suppliers to make sure you are getting the best deals. Expense management is especially important if you are looking to upgrade your business’s equipment.
- Run a tight ship when it comes to invoices. This can be done by checking new customers’ credit; asking for a deposit when a customer makes an order; and when billing time comes around, sending the invoice on time and asking for acknowledgment that it has been received. Accounts receivable will be much easier for your small business if you can hire someone dedicated to handling your business’s billing operations.
- Review your insurance to make sure you have just the right amount of every kind of necessary protection.
- Seek alternative financing. Landing in a financial crunch is normal for any small business; the true test is how you work your business out of its troubles. Getting in touch with an alternative lending provider, like a capital advance, can provide your business with valuable knowledge if you find yourself struggling for capital or looking to grow.
Can you agree with the 76% of small business owners polled regarding the health of their small business’s finances? Now is the time to find out. Taking a good look at even the minor details of your business’s operations will provide you with a vast amount of knowledge, and will help guide you in the direction of growth.