It doesn’t take an advanced degree in finance or a CPA to keep your finances in check. And having a head for what’s happening with your money is crucial for small business success, just as it is in building personal wealth. So what type of quick money management tips help set a good groundwork for overall financial success? Here are 3 great ideas that won’t take more than a few minutes to implement.
Have a Plan
It seems detailed and time consuming to come up with a financial plan, but the type we’re talking about here should only take a few minutes. As a business owner, you probably have a pretty good idea where your money is going each month. That said, how much of a game plan do you have when it comes to the growth of your business? Sure, everyone wants to make more than they did last year, but have you sat down and decided how much more you’re planning to make and how? Are you launching new products? Looking to grow your client base? Opening up a new store or launching an online store? Grab a pen and paper and flush out just the basics of your growth plan. What will you need? How much do you think it might cost? How much of your current profits are you planning to put back in the business?
If you don’t have a plan, then you’re bound to lose, or at the very least, not grow. Even a simple framework will help you get started and you can flush out the details more once you’ve got the basics laid out.
Automate Savings
When you hear the words money management, you’re bound to talk about automate paying the bills, but have you thought about automating your savings as well? If it’s true that you won’t spend money that’s not in your account – then it’s doubly true that you’ll save more if you set it aside before you get to work budgeting,paying bills, and spending your hard earned cash. The easiest way to make it happen is to set up an automated transfer to a savings account every time you get paid. Just consider automated saving as paying your best investor – you.
Prioritize Bills & Pay Early
It’s common to set aside money for bills every payday. But it’s even better money management to pay your bills early. You’re less likely to spend that money somewhere else and won’t find yourself scrambling to come up with the cash. If you’re really looking to improve your money management, consider even paying a little more than necessary every bill period. Soon you’ll build up a reserve and you’ll be sitting pretty if you ever run low on funds.
Frequently Asked Questions
1. Do I need a detailed financial plan for business success?
No, a detailed financial plan isn’t required, but having a basic framework is essential. A simple plan outlining your growth goals, potential costs, and reinvestment strategies can provide direction and prevent financial stagnation. You can build upon this framework as your business grows.
2. How can automating savings help with money management?
Automating savings ensures that a portion of your income is set aside before you start budgeting or spending. This approach helps build your savings consistently without the temptation to spend the money first, making it a crucial step in improving your financial health.
3. Why should I prioritize paying bills early?
Paying bills early helps you avoid last-minute financial scrambles and reduces the risk of accidentally spending money meant for essential expenses. It also allows you to stay ahead financially, potentially building a reserve if you overpay slightly each period.
4. Is it difficult to set up an automated savings plan?
No, setting up an automated savings plan is simple. You can schedule an automatic transfer from your main account to a savings account every payday. This way, saving becomes a habit without requiring extra effort each month.
5. How does money management relate to small business success?
Effective money management is critical for small business success. Having a clear financial plan, automating savings, and paying bills early all contribute to better cash flow management, allowing your business to grow and become more financially stable.
