Starting and growing a small business is no easy task. You will need to deal with multiple challenges at the same time that you have important resource restrictions. In case you are just starting a new small business, you need to ensure that you don’t only have enough capital to support all your expenses as that you are also able to properly fund it before you turn it to a profit.
#1: Expenses:
When you are just starting your small business, you should make sure that you keep your fixed expenses as low as possible. So, it is very important that you carefully plan all the large expenses for one year. These include payrolls, taxes, utilities, debts, cost materials for products or services, rent, among others.
#2: Avoid Expensive Credit:
While we understand that as a small business owner you are always short on cash, it is important that you avoid expensive credit. While you may not be able to get credit at your preferred conditions, it is always a good idea to check the different options that you have.
#3: Create A Clear Distinction Between Personal And Business Finances:
While you may be launching your first small business, it is important that as soon as you take care of your new business name and registration, that you open a commercial bank account. This will help you keeping your finances separated and not having your personal money involved in your business activities and vice-versa.
#4: Consider Insurance:
We know paying for insurance is far from thrilling, however, the truth is that if something happens, you will be covered. So, you should make sure that you do good research about the multiple insurances that you have available to determine the best one for your business as well as for your personal needs.
#5: Be On Top Of Your Money Movements
Even if you have a small business, it is not difficult to lose track of the money that you are spending and on the way that you are moving it. When you are doing this, you will be able to notice where you are spending the most as well as which areas tend to perform more efficiently. This will allow you to determine the areas of your business that can improve and the ones that are already optimum.
#6: Always Negotiate
As a small business owner, you will need to contact different vendors. So, no matter how much you like a vendor, make sure that you negotiate the terms before you actually sign up a contract with them. You should take a closer look at the grace periods or late payment penalties. Make sure that you get the best deal you possibly can.
#7: Consider Leasing The Business Equipment
You need a lot of capital to start a new business from nothing. So, you want to ensure that you save as much as you can. With this in mind, you should consider leasing business equipment instead of buying it. While you won’t have the latest version of the equipment, the reality is that it should probably be more than enough to get started. Besides, it will be a lot cheaper.