If you have decided to undertake the exciting task of opening your own small business, you will need to make taking care of your finances a priority. Often those who start their endeavor without taking the steps to prepare for the monetary aspect of their business may find their finances become too difficult to organize as time goes on. Here are some steps a new business owner can take before they open their doors to the public so their money is tracked properly from the very start.
Get Your Personal Finances In Line
In the beginning, you will need to use personal finances to get your business up and running. You may need to apply for a loan to get money for startup costs. Take the time to obtain a credit report of your financial situation so you can work on any areas that may hold you back from getting a business loan at a favorable rate. If your credit is dicey, work at paying off personal credit cards or having inaccurate information removed from your credit report before you head to the bank to ask about a loan. When your personal finances are in order, set aside a predetermined amount to use for the startup of your business. Pay this money back to yourself when a profit is apparent.
Know How Much Your Expenses Will Be
Make it a priority to know exactly how much your monthly expenses will cost before you start your new venture. Write a list of all the money you will need to pay each month out to run your business properly. This would include rent, electricity, payroll, and supplies. Once you have a ballpark figure needed each month to keep your business afloat, you can price your wares or services appropriately to pay these bills as they come in.
Determine When Profit Will Begin
When you are first starting out, you may find your profit is nowhere near enough to pay the expenses. You can determine your break even point by utilizing a calculator to figure out how much you need to sell each month to make enough to pay that month's bills in full. Your fixed costs would need to be paid first. After these are paid, approximate how many products or service calls you believe your business is capable of handling in the month. This will help you find what variable cost you have available to provide the goods or services to your customers. When you find you are selling more than the amount you had projected, you will be on your way to seeing a profit margin form.
Get Some Needed Help
Often a new business owner finds they struggle to come up with the time to go through their paperwork to figure out finances. It is important to track each expense and sale so you do not have inaccuracies in your numbers when tax time comes around. To get a better handle on your money, consider hiring a business consultant to help you get on track with the ebb and flow of money within your business. A consultant will help you make decisions in how to handle your finances so you obtain a profit quickly. Call reputable business consulting services before you have your grand opening so you are prepared to stay organized with your money intake and expenses from day one.Share