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If you are a new small business owner one of the first challenges you face when getting started is learning how to effectively manage your finances. Creating a budget is the perfect place to start since it gives you a road-map for all of your business decisions going forward and allows you to positively impact your overall operations.
We’ve worked with many different types of small businesses, from restaurants, salons, and retail stores to landscape designers and fitness studios. We know that maintaining a good budget is universal to any business’s success.
Here are our top 5 budgeting hacks that every small business owner should know:
#1 – Separate business and personal expenses
We’re sure you’ve heard this before – if not, take note! Separating business and personal expenses is one of the first things you should do when getting your business off the ground. When your personal expenses are mixed with your business expenses, you won’t be able to get an accurate estimate of your business expenditures or profits. Separating these expenses will also make filing state and federal taxes much easier at the end of the year.
#2 – Get educated
Knowledge is power! Having a basic understanding of the financial side of your business can give you confidence when making business decisions. Taking an Accounting 101 or Budgeting Basics class can give you the tools you need to a better understanding of the underpinnings of your business.
#3 – Hire a pro
Okay, so now you know the basics about the financial DNA of your business. When it comes to some of the everyday functions and processes, however, we recommend hiring a professional. Hiring an experienced tax accountant, business attorney, and bookkeeper, can drive the profitability of your business and help maintain your budget. Plus, they will likely catch issues that you may miss.
#4 – Automate your bill payment schedule
Managing your business’s financials is a task in itself, so it’s easy to forget your own personal finances. If you’re making payments on business loans, credit cards, mortgages or car notes, do yourself a favor, and set-up automated payments so you don’t feel as if you are working overtime to manage your financial responsibilities.
#5 – Utilize the right tools
Implementing the right budgeting tools for your business can have a huge impact on your businesses success. By utilizing software like QuickBooks that offers a budgeting tool, you can streamline your business, save time and increase productivity.
We know maintaining your business budget can be a hassle, but it’s well worth it in the long run! We hope these budgeting hacks will save you time and headaches on your journey as a small business owner.