As a small business owner, the power of influence, recognition, and experience are often not on your side. Many business owners that have been in the industry for decades can easily jump into a new venture and successfully run their finances and budgets without a hitch. But for countless small business owners, it’s not so easy. Many find themselves confused and lost when it comes to financial matters because they’re caught up handling everything else associated with running a company.
With this said, it’s important to know some of the best tips and tricks a small business can use to get their budgeting and finances on track as the next quarter comes ever closer.
Make Customer Payment Options Extensive
Nothing is more frustrating as a consumer than finally deciding to make a purchase, but not being able to use your preferred payment method. Perhaps you have even been the one looking to pay for a particular service and finding nothing but dead ends. Being unable to find a quick and simple payment solution that fits your needs from a company standpoint can be a serious pain point and, in some cases, even lead to you choosing one of their competitors over them.
As a business owner, the last thing you want is potential clients and pre-existing clients being frustrated by your lack of payment options. In order to counteract this, you may want to begin looking into as many payment options as is feasible for your business to provide. Some of the main options other businesses provide for accessibility purposes include checks, ACH transfers, PayPal, Apple Pay, Square Pay, and online credit card providers.
Use Incentives to Encourage Expedient Payment
Do you remember when you were in school and given the opportunity to sell items for fundraisers to your friends and family? If so, you probably also remember that the people that spent the most and paid for their products before the deadline were often given gifts for being expedient.
The same idea can be applied in your business in relation to your client payment process. Instead of waiting for your client to pay on time and punishing them for overdue payments, try incentivizing expediency in various ways.
To put this into perspective, simply look at T-Mobile Tuesdays and its influence on their customer base. By providing customers with incentives they can only utilize if they pay on time and continue to use their services, T-Mobile effectively incentivized prompt payments—and it’s working.
Create a Budgeting Team Within Your Business
All too often, small businesses feel that involving their team in their finances and budgeting is a bad idea. However, this is far from the case. After all, why rely on solely your insights into the business to create the budget for an entire company to depend on.
Instead of pushing your team out when it comes to financial decisions pertaining to the company, select a group of your most responsible team members and use their powerful insights into the budget to build a more successful and inclusive business budgeting strategy.
The best way to start this process is to first show them your current budget, explain what it accounts for, and then begin brainstorming on ways to improve it for the future. As each month passes, regroup and do this process all over again to keep a budget that is in tune with your current position and helping rather than hindering you and your team.
Don’t Forego Personal Payment
Although many small business owners want to save money and put more of their profits back into the company itself, underpaying yourself and budgeting around this is a surefire way to insure financial complications later on in the business’ lifespan.
The reason for this is that, as the business grows and your budget does as well, you still will never be accounting for a tangible wage for yourself and, when you finally do, it will cause some serious problems with your overall finances.
Instead, begin with reasonable payments to yourself and your staff and focus on other expenses secondarily so as to avoid costly budget issues in the future once the business truly takes off.
Overestimate Your Expenses
Although this tip may seem relatively obvious to most people, it is still highly important to take into account in any small business setting. To put it into perspective, would you rather have more hot dog buns than hot dogs or not enough?
Just like most packs of hot dog buns include two extra buns just in case, it’s important to overestimate the amount of “buns” your business needs each month so as to never wind up with a “bunless hot dog.”
In other words, always account for more expenses than you actually have to avoid ever being without the finances to pay for them all. In doing this, you can ensure your company is always in the green and financially responsible from day one.
Make Budget Revisions as Your Business Grows
Just as industry is constantly changing and the market is ever-expanding, businesses change, grow, and expand as well. With this said, keeping the same budget throughout the entire course of your business’ lifespan is the equivalent of wearing the same outfit you wore in preschool to college.
For instance, let’s say you decide to make environmentally sustainable purchases for the office in the future to promote green living and eco-friendly business, but you’ve never made a purchase like this before. Your budget won’t account for these purchases and you will ultimately find yourself in a bit of a predicament as other accounted-for expenses come through.
Instead, sit down with your new budget team, develop and new budget around these expenses, and know you are prepared for these new costs pertaining to your business and its growth.
Despite there being countless more tips and tricks related to budgeting as a small business owner, these will allow you to start making the essential changes needed. By using these tips, you will be able to have a stable budget that is not only tailored specifically for your company but helps you to expand your business rather than losing crucial clients to pesky competitors.