Financial Tips For Businesses In 2021

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StrategyDriven Managing Your Finances Article |Financial Tips|Financial Tips For Businesses In 2021As a business owner, it is always important to be intelligent with your finances in order to maximize your bottom line. For many, 2021 is when financial intelligence and careful management are critical with many companies struggling due to COVID-19. The businesses that manage to succeed and come out the other side in a strong position will be those that are intelligent with finances during this time, so what are a few helpful financial tips for businesses that can help right now? Keep reading for a few tips that will hopefully help to improve your company’s financial health in 2021.

Go Through Regular Expenses

One of the first steps to take is to go through all of your regular expenses and to see if you could either cut out the expense or make savings by changing. Keep in mind that cuts and changes could make work harder for staff and/or impact the quality of the product/service you provide, so it is important that you make intelligent cuts and changes that won’t negatively affect the business.

Outsource To Address Staffing Issues

If you find yourself with staffing issues during COVID-19 (like many), it can be hard to know what to do. Hiring new staff can be a huge expense, so instead, a good alternative is to outsource aspects of your operation to specialists. This can lighten the load for your existing staff and ensure that the work is being completed by a specialist without paying expensive employee costs.

Embrace Remote Work

Most businesses have had to experiment with remote work during the pandemic, and many have found that it benefits all parties. One of the main ways it benefits the business is that it helps reduce costs, and you could even downsize or go without a central office once the lease expires to free up a huge amount of money.

Sell Unused Equipment/Buy Second Hand

If you have any equipment that you no longer need, you could look to sell this to raise some extra cash. Alternatively, if you need new equipment for your business but don’t want to spend a fortune on new equipment, you could look to buy second hand. This is a smart way to keep costs down while making key improvements to your business – click here to find more about selling and buying used equipment for your business.

Look Into Solar Power

The world is becoming greener, and every business should be taking action to reduce its environmental impact. One of the most effective ways that you can do this is by switching to solar power, which will not only greatly reduce your environmental impact but also help you to make huge long-term savings. The upfront costs can be high, but ultimately this will prove to be a smart financial investment and help you improve your green credentials in a time when today’s consumer is selective and eco-aware.

Take Out A Loan If You Need It

Many businesses owners are reluctant to take out a loan, but it can actually be incredibly useful and help companies to manage during challenging periods or to cover growth plans (such as the cost of solar panel installation). There are lots of different options in terms of types of loans, so it is important to research each one and find the right type for your business and needs.

Negotiate With Vendors

You might also find that now is a smart time to negotiate with vendors. The pandemic has affected every person and business in different ways, so you might find that they are willing to renegotiate terms and rates that could help you to free up costs. Additionally, if you are coming to the end of your contract, it is worth exploring your options.

Invest In The New Normal

It is also important to realize that things will not simply be “business as usual” and that some changes are here to stay. This means that it is important to invest in the new normal and to adapt your business so that you can thrive in a post-pandemic marketplace, which might include contactless technologies, remote work tools, online services, and more.

Hopefully, these financial tips will come in handy and help you to make smart financial decisions during this challenging time and come out the other side in a strong position to find post-pandemic success. It’s not going to be easy to succeed in this industry due to the effects of the ongoing pandemic, yet these tips can help make it more manageable.

Unexpected Costs of Running a Small Business

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StrategyDriven Managing Your Finances Article |Small Business Costs| Unexpected Costs of Running a Small BusinessRunning a small business may seem easy to do on paper, but there really are so many other things that you need to think about. One of them is unexpected expenses because this can easily be the downfall of your business.

Extra Office Space

Sure, a home office may work for your small business, but zoning and other related regulations may require you to have something a bit more official. When making the decision to rent or purchase a property, you need to think about how much space you have now and how much you actually need. A lot of companies will offer you temporary office space, which is great if you are not quite sure which direction you need to take your business in, or even the arrangements that you are going to have. Utility costs can also eat away at your budget. Leased spaces will often include these types of costs as part of your agreement too, so look into those and always make sure that you are getting the best deal.

Equipment and Maintenance

The tools that you need to run your business need to be maintained. You may also need to pay out for equipment you didn’t think you’d’ need, such as a scanner, copier or even a shredder. Stationary should also be included in your budget because this can also eat away at your money more than you realise. If you want to save money here, then consider buying equipment second-hand from a range of auction sites. You should also buy stationery or any other related equipment in bulk, as this will help you to cut down on the cost per item.

Employees

Salaries, medical leave, health insurance and even training can factor in a large amount of cost for your budget. If you fail to invest in your employees by providing them with a reasonable wage or even a clean office environment then they will leave and this will cost you even more in the long-run. The cost of replacing an employee can be extortionate depending on the avenues you need to go through, so make sure that you set aside a good amount of your budget to accommodate this.

StrategyDriven Managing Your Finances Article |Small Business Costs| Unexpected Costs of Running a Small BusinessSecurity

If your business is not secure then you will be putting it at risk. It doesn’t cost a lot to invest in
CCTV installation, but you would be surprised at how much it could help you to prevent break-ins. You should also focus on securing your network as well. This can be done through encryption, which will cost you, but it is most certainly a worthwhile investment.

Shrinkage

Shrinkage refers to inventory loss at some point between the purchase you make for the items and the sale you make to your customers. Shrinkage can occur through vendors not shipping the required total of products, couriers losing packages or even poor inventory management. This expense can be entirely prevented by being diligent and by also making sure that you document and process every single step of the shipment until it reaches your customer.

7 Great Tips on How To Fund Your Business

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StrategyDriven Managing Your Finances Article |Fund your business|7 Great Tips on How To Fund Your BusinessThe first thing that comes to one’s mind when deciding to start a business is, of course, the funding. Whether it’s capital to start the business or funds to run the business operations- you need M.O.N.EY!

The cost of doing business can get steep quickly, so the smart thing to do is start with as much money in your bank account as possible. But even if you don’t have much money in the bank, there are still tons of places to source from.

What Types of Funding Are Available?

Once you’ve decided what type of funding is right for you, the next step is deciding where you’ll get the funds. Again, it’s good to have several funding options so that you can compare the terms and conditions of each.
If you are short of cash for the business, then you’ll need to borrow it. Or maybe source money from friends and family or even apply for a grant. The type of funding for you depends on what you need, where it will come from, and how fast you need it.

Personal Savings

One popular way to fund your business is through your savings. Before you venture into a business, you can start by saving towards it. You can tap into your savings account if you’re starting a new small business or use the money to invest in an existing enterprise.

A Business Loan

A business loan is a good option if you’re looking for startup capital or paying off other debt that you owe. If you decide to pursue this path, you might wonder, How do business loans work? The money comes from a bank or alternative lender in cash, equipment, or different types of collateral. Some lenders will even give you a loan to help you become more profitable or buy inventory.

Most business loans come with some interest. The interest will vary depending on the lender. The trick with these business loans is to clear the loan as fast as possible to avoid high-interest rates.

Business Line of Credit

A business line of credit is a revolving credit card that you repeatedly use as long as you have the money in your account to pay back each time. It’s perfect for ongoing expenses, such as utility bills and insurance, that you have to pay even when cash is tight.

Asset-Based Loans

You might also apply for an asset-based loan, which puts equity from your business up as collateral for the loan. For example, if your company owns a car, equipment, or property that secures the debt, it could be better than a traditional loan because you won’t have to pay as much in interest, and it could even help you avoid bankruptcy.

Talk to Friends and Family

If the money you need is relatively small, perhaps $5,000 or less, a friend or family member might be willing to give you a loan with no interest or repayment schedule. This type of funding is a gift because there’s no expectation that you’ll pay it back. It’s an excellent option for cash emergencies when you don’t have the time or resources to find other funding sources, but make sure you’re not taking advantage of someone who can’t afford to give you a loan.

Crowdfunding

One more form of funding that’s becoming popular is crowdfunding—individuals can now fund projects through money-raising websites and apps. You’re not getting a loan with crowdfunding. Instead, you’re raising funds to launch your business or fund a specific project, such as manufacturing and selling your product.

Apply for Grants

If your business is in a field related to caring for the environment, improving technology, or providing social benefits, you may be eligible for funding from government sources. There are grants available on federal and state levels that can help small businesses get started or grow.

To Sum It All Up

There is no need to stress about business funding. There are tons of options to pursue when exploring financing for your business.

How To Maximize Your Businesses Financial Success

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StrategyDriven Managing Your Finances Article |Financial Success|How To Maximize Your Businesses Financial SuccessAny business will likely be aiming for greater financial success. No matter whether you own a small business or a large corporation, there are simple and effective ways of maximizing your businesses financial future. If you are under-educated on finances and are often stuck on how to maximize your business budget or profits, here are some top tips.

Make future projections

Projecting the future of your business will mean that you have a desire to achieve success. When you plan well, you will likely be able to attain greater financial profit and success. If you lack projection knowledge, using a pro forma balance sheet will help you project your business financial future. You can dictate where you will spend your money and what profits you envision.

Without future projections, you may not know where and how is best to spend your budget. You might spend money on the wrong things and become unstuck when you have no budget left to spend on what’s important. You will be able to look at your businesses current assets and forecast their financial future.

Be savvy with your budget

Your budget will dictate how far your finances will stretch. Additionally, it will also forecast the profit ratio you could make.

If you allow your business to have a big monthly spending budget, then you might overspend and attain a reduced profit. However, if you are strict with your budget and are savvy with money, you will have a greater chance of attaining more profit.

The savvier you are with budgeting, the greater your profits will be, which will lead to greater financial success.

Track your spending

Alongside budgeting, it will also benefit to track your spending. If you manage to track spending on a daily basis, then you will have a better chance of curbing bad habits and ensure that you spend your budget wisely.

Tracking your spending will allow you to acknowledge where you are overspending. You might not realize how much casual lunches cost your business. When you monitor your cash, you will be able to see where you can save, which will help you maintain a greater profit. When you manage to curb habits and track your spending effectively, you will likely be able to achieve increased profits.

As well as daily tracking, you should ensure that you do monthly office checks and correlate your spending against your profit to ensure that you are making as much profit as possible.

Ensure customers pay you on time

Ensuring that your customers pay you on time will help your business control its finances. If payments are delayed, it will hinder your monthly profits and not look great on your accounts.

To ensure that customers pay on time, you should have a contract that states a deadline. If the payment is missed, then a penalty should occur.

Meet tax deadlines

As well as your customers needing to meet deadlines, your business does too. You will need to be aware of tax deadlines so that you can avoid penalty charges. If your business fails to meet such financial deadlines, it could result in debt.

Your company may not be able to afford the debt, which will have a significant impact on finances. It may even result in stopping production and putting the business on hold.

Control stock

Most businesses will have hold of stock. Having it under control will mean that you have enough stock to maintain your business.

Whether you overbuy or underbuy stock, it will affect your business. You won’t want to overspend and be left with stock for months on end that won’t sell. Similarly, if you lack enough stock, you won’t be able to satisfy every customer, which could leave them losing interest in your business. You won’t want to lose customers as it can have a significant impact on your business.

Get the right funding

Every business will likely need funding to start up. Small businesses may require overdrafts, which can help in case of emergencies. Furthermore, large corporations may need funding for maintaining their staff capacity.

Either way, getting the right funding will ensure that your finances are reliable. You won’t want to go into an unplanned overdraft and incur a charge.

Deal with problems straight away

If you have any financial problems arise, it is best to deal with them straight away. If you have the money to pay the fee or penalty, then you should fulfil it as soon as possible. The longer you leave it, the more chance you might incur extra fees, which your company might not be able to afford.

Although problems can reduce your profits, dealing with them straight away will ensure you do not go into debt. You will be able to maximize your finances and get back on track sooner.

Increase customer referrals

Your customers and their business to you are how you gain profit. Without regular customers, you may not achieve any profit. Thus, ensuring that they are satisfied will aid in maximizing your businesses finances.

If you satisfy your customers, then they will likely continue to use your business. They will spend more money or more regularly, which will help your finances. Furthermore, if they refer your business to other friends and family, then you will gain more customers, which will help you increase profits even further.

Although it might feel daunting asking your customers to refer you, they will likely agree too. If they love using your business, then they will likely want their friends and family to attain the same experience. You could ask them to promote you through word of mouth or simply ask them to leave a review, which will look great for other new customers. Customer testimonials can be promoted online through your social media or website for new customers to see.

To maximize your business financial success, use these top tips. It can be as simple as budgeting and dealing with financial problems on the day to increase profits and reduce the risk of debt.

Cutting Your Business Costs: Top Tips

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StrategyDriven Managing Your Finances Article |Business Costs|Cutting Your Business Costs: Top TipsEven with less costly technology and marketing tools, it costs money to run a firm, and those expenses rise regularly. You must keep your expenses under control to maintain your profits. Here are some strategies to cut costs and increase your bottom line in your business.

Lower your workspace costs

Depending on the health of the commercial real estate market in your area, you may be able to take advantage of low office space rates to relocate your company or negotiate better lease terms with your current landlord.

If you do not need to conduct your business from a commercial location, even better. Why not run your business from your home or on the go?

If this is not possible, look at other ways that you can save money. Can you downsize your commercial property? Can you look at lowering your bills by installing insulation from www.insofast.com? Can you talk to your landlord about switching energy and utility suppliers if there are cheaper options available?

Reduce staffing costs

If at all feasible, involve family members in your business. Your partner could be willing to take on a business responsibility, saving you the cost of employing someone else.

If you have children of a suitable age, why not involve them in your business as much as possible? For young people, learning about business is a fantastic experience that keeps money in the family.

Another approach to save on staff expenses, depending on your business, is to engage contract workers or freelancers, who save on taxes and other employee-related expenses. Just make sure you follow the IRS rules for determining who is a contractor and who is an employee.

Lower vehicle expenses

If you own or operate a service or contracting company that requires a vehicle, you are probably well aware of how vehicle costs might affect your bottom line. Larger vehicles, such as vans and crew cabs, might have exorbitant fuel and maintenance expenditures.

How can you lower your transportation expenses other than limiting business vehicle use to only essential travel?

If you have a lot of miles on your business vehicle(s), cutting down on fuel consumption is critical. Diesel and hybrid vehicles are more expensive to buy at first, but they can save you money on gas and maintenance in the long run. Because modern trucks use more advanced materials to cut weight and improve efficiency, it might be worth turning in your gas guzzler for a more fuel-efficient vehicle.

If your company is just getting started or your budget is limited, leasing a car offers many benefits, including fixed monthly expenses, the flexibility to return the vehicle at the end of the lease period, and the elimination of depreciation and maintenance expenditures. If it makes sense, most leasing businesses offer lease-purchase arrangements, which allow you to buy the car at the end of the lease term.

These are just a few of the ways that you can cut your business costs and raise your bottom line. What are your tips?