When you are a small business owner, it’s tough to keep all your finances in check, and it’s easy to get in too deep into the red.
With all sorts of expenses, before you know it, you may be on the wrong side of where you want to be. Then what? It’s best to avoid the dreaded debt and stay tight from the beginning.
Here are some tips to help you before it gets too late.
Cut those unnecessary costs
Sure, it’s nice to pamper your employees, or your customers for that matter, but if it’s getting to be too much, cut out those perks.
Recommended for YouWebcast: Growth at a Scale Up: How to Grow When You're No Longer a Startup
Maybe you don’t need to bring in lunch for everyone every Friday or supply everyone with a million blue ballpoint pens and other supplies. Keep your spending in check and even the small change can make a difference. Try switching over from paper to electronic documents, like Google Docs and Microsoft Office; that can save a surprising amount of money and resources.
You may need some more help, but might not be able to afford a full time salary. Think about hiring interns.
They can even do small, more menial tasks for you and while they provide a service for you, you are providing valuable on the job training and even some school credit. Make sure they can complete what you want them, too. You may be pleasantly surprised at the good work ethic you can find in students. They also have a set time frame in which they’ll be with you, and if things do get really bad, you don’t need the added stress of letting a full time paid employee go.
Get your payments on time
When your customers owe you money, get it.
Don’t wait too long to bill, because the longer you wait, often the longer they’ll take to pay. If you can get a bill out as soon as work is done, they’re more likely to pay on time.
Have a percentage paid up front
Whereas full payment before a job is done is a turnoff to customers, they do understand often times you need a percentage up front to purchase supplies.
It’s okay to do this, and you can pay upfront for the supplies instead of charging and waiting for your payment. It keeps you safer.
Hire some help
Maybe this goes against trying to avoid spending money, but there does come a time when you need some help.
Whether it’s an accountant and/or spending money on the best accounting software to help out with your finances or another person to help take on some of the load because you are finding you simply don’t have enough time, you may need some help. If your needs are beyond what the interns can do, it may be worth the money to help get you and your small business back on track.
You’ve worked too hard to let it go without a fight. Of course, you’d rather not be in the red at all, but if you do get there, there may be a way out.
If you stay on top of things, you can stop the bleeding before you’ve dried up.
Photo credit: ps3blog.net