Business owners often struggle with the financial side of their business. Often, they are so busy running around and trying to keep up that they don’t stop long enough to take care of their finances. Which is why they sometimes end up getting a payday loan, which isn’t always the best solution.
In this article, we will discuss 10 hacks that every business owner needs to know about in order to grow and stabilize their money-making ventures.
1. Pay Yourself First (PYF)
Paying yourself first is a great way to start building money.
This is to make sure that your personal obligations are taken care of before dedicating all your resources to the needs of the business. You might even want to take out a short term loan, to tide you over until your cashflow gets back on track.
It will make life easier for everyone when there is enough left over after paying taxes and living expenses.
In the beginning this might just be £100 per week but as time goes on increase it so that at least 15% of all revenue generated should go straight into your own pocket (or account).
PYF is an investing strategy in which one decides what percentage of income will be invested and puts those investments aside before anything else happens. The remaining amount can then be used towards personal spending or paying off debt.
2. Take Advantage of Different Types of Investments
Investments are a great way to make money. There are many different types of investments, all with their own strengths and weaknesses.
It is important for business owners to take full advantage of the different kinds that are available in order to maximize profit potential. The three most common types are stocks, bonds, and mutual funds/ETFs (exchange traded funds). Each serves its own unique purpose but can also be used together as well. This will not only diversify one’s portfolio, but it reduces risk which increases return on investment overall.
This means instead of just investing your income back into the same kind(s) each month rotate between at least two or even three, so you always have some earning interest others grow over time too!
3. Invest in A Business Savings Account
Having a business savings account is an amazing way to grow one’s money. This account can be used for anything from unexpected expenses that may arise or even start-up costs for future businesses.
This type of investment differs from the others in the sense that it doesn’t have a return on investment associated with it, but still offers benefits which should not go overlooked. Instead of being taxed every time you take profit out this helps keep more money within your business by offering tax free growth and easy access if needed!
A Savings Account (also known as a “Demand Deposit” account) allows funds to be deposited into such an account at any time without notice whereas other accounts require prior notice before deposits can occur; withdrawals are typically limited to 6 per month.
4. Create A Budget and Stick To It
Business owners need to create a budget, even if they are just starting out. This will not only help them plan for the future, but it helps keep their financial stability in check as well.
With this information business owners can know exactly where their money is going and how much they have left over after paying bills and other expenses each month which allows them to better control their personal finances while still growing the business!
Creating a monthly or yearly budget should be easy with all of the available online tools that exist today such as Mint. This site makes planning one’s finances easier than ever before by allowing users to track what goes in and out of your account(s).
5. Negotiate Rates With Your Vendors and Suppliers
Business owners should always try to negotiate rates with their vendors and suppliers. This can be done in a number of different ways but the most common are by phone or email because it is less confrontational than doing so face-to-face.
There are many benefits associated with negotiating one’s own rates, such as being able to get better business deals, but also helps increase revenue overall which means more money for both you AND your supplier! Everyone wins when they work together instead of against each other.
With any negotiation there has to be give and take on both sides in order for this tactic to succeed however if something cannot be agreed upon then that is okay too since no deal was made at all! It simply wasn’t meant to happen.
6. Set Aside Money for Taxes
Business owners should always set money aside for taxes, especially if they are not using an accountant. This can be difficult to do but it is important in order to avoid any surprises come tax time.
By setting money aside each month business owners ensure they have the funds necessary to cover their taxes without having to worry about where the money will come from. Not only does this make things less stressful but it also allows them more freedom when it comes to running their businesses!
There are a number of different ways business owners can go about setting money aside for taxes, but the most common is by creating a specific account just for this purpose. This way it is easily accessible and harder to forget about since it is used specifically for paying taxes!
7. Use Credit Cards Wisely
Credit cards can be a great way to help business owners grow their businesses, but they need to be used wisely. This means not only paying off the balance each month but also using cards that offer rewards.
Business owners should sign up for a corporate credit card that offer cash back, airline miles, and other types of rewards. This helps them get free stuff or save money on future purchases which in turn helps the business grow even more!
Just like anything else in life, credit cards should be used in moderation otherwise they can become harmful instead of helpful. It is important to always read the terms and conditions before applying for any card, so you know what you are getting into.
Additionally, make sure to keep an eye on your credit score so you know where you stand and if there are any improvements that can be made.
8. Invest in Yourself By Taking Courses and Learning New Skills
One of the best investments business owners can make is in themselves. This means taking courses and learning new skills that will help them in their businesses.
There are a number of different ways to do this, such as online courses, books, or even attending workshops and seminars. The important thing is to find something that interests you and stick with it!
Not only does investing in oneself help improve one’s knowledge but it also makes them more marketable which can lead to better job opportunities in the future! Additionally, being able to say that you have taken courses and learned new skills looks great on any resume!
Business owners should always be looking for ways to improve themselves so they can continue running successful businesses. There are many different resources available today that allow them to do this, and it is up to you which one(s) you will use.
9. Track Your Expenses and Revenue
Business owners need to track their expenses and revenue as much as possible. This allows them to stay on top of where all the money is going each month which can be helpful in many different ways.
Not only will tracking your expenses help you save more money, but it also helps pinpoint any problem areas that may arise such as too much spent on one specific area or not enough being made overall. Business owners should find a system that works best for them and stick with it!
10. Automate Your Finances As Much As Possible
Automating finances is a great way for business owners to save time and money. This involves having systems in place that help take care of the day-to-day tasks, so they don’t have to worry about them anymore!
For example, setting up automatic bill pay can reduce any late fees or interest charges while also ensuring bills get paid on time every month. Additionally, automating finances helps businesses run more efficiently since there isn’t as much guesswork involved when it comes to where all the money goes each month.
Conclusion
These are just a few of the many financial hacks business owners should know about. By using these tips, business owners can save time and money while also keeping their businesses running smoothly!
