Written by: Maricel Tabalba
Even as you devote your energies to the creative and inspirational aspects of your organization, it’s crucial that you keep an eye on financial matters. Looking toward the future, it’s important to use your money to grow your enterprise and set yourself up for success in the years to come. There are a few easy steps you can take to ensure that money-related snafus don’t trip you up.
Separate Your Business and Personal Accounts
Keep your personal and business finances strictly separated. Besides giving you a clearer picture of where you stand from a business perspective, this will also help you out whenever you seek financing or if you wish to sell your company in the future. If you began running your company part-time out of your own home, this may seem challenging but it’s worth the effort in the long run.
Consider opening up a bank account for corporate purposes. You can stay apprised of your business credit score by obtaining your business credit report from Dun & Bradstreet, Experian and other credit reporting agencies.
Minimize Expenses Through Careful Budgeting
Every dollar in cost savings you can achieve will increase the profitability of your organization. You probably can’t do much to lower your rent, utility bills and other fixed costs, but there are tons of ways to cut down on your budget for variable expenses.
Take the time to understand what you need the most and prioritize these supplies and products. Then figure out what products and services have less expensive versions. Set a strict budget and make sure not to veer off course.
Become Familiar With Cloud-Based Accounting
The current trend in accounting lies in taking advantage of the convenience of cloud computing. You’ll be able to access your files from virtually anywhere with your laptop, smartphone or other mobile device. If you buy anything on the spur of the moment, you can record your purchase immediately rather than waiting for your credit card statement.
Your ledgers will be duplicated on multiple machines throughout the cloud. You won’t be at as much of a risk of data loss as you would be if you kept your accounts on your own personal computer.
Hire the Necessary People
Too many employees can make your payroll expenses skyrocket, but too few could mean inadequate order fulfillment and customer retention. Try to come up with a formula for how many people you need based upon clear, objective business data.
For tasks that don’t demand the attentions of a full-time worker, investigate third-party professionals. You can find artists, composers, writers and other talented freelancers on internet-based platforms like Upwork. Calling upon independent contractors on an as-needed basis allows you to accomplish what you need to get done without having to commit to a lengthy engagement.
Plan for the Worst
Even if things currently look rosy for your enterprise, you should recognize the possibility of sudden, unexpected changes. This is particularly the case for artistic endeavors because the public’s tastes can shift rapidly. Many small businesses have to shutter their doors in the wake of unforeseen contingencies, but making solid backup plans can help you avoid this fate. This could include acquiring business insurance, which provides a measure of security against events that are outside your control.
You probably don’t want to spend too much time crunching numbers, but a healthy amount of attention to financial matters will promote the prosperity of your activities. Add solid business sense to your creativity, and your firm will reap the rewards of both.
–Maricel Tabalba is a freelance contributor for Credit.com who is interested in writing about personal finance advice for Millennials and college students. She earned her Bachelor of Arts in English with a minor in Communication from the University of Illinois at Chicago.