One of the most rewarding and difficult experiences in life is running your own company. All the hard work, the long hours, they can really grind you down. And yet, all the freedom, the feeling of creating something, of giving people jobs, it can mean something. And of course, let’s not even mention the money. But in order to make it a little bit easier, and to get the positive aspects even better, you should be as efficient as possible. And one of the more important aspects of efficiency is managing your company’s financial aspects.
The whole point of a company is to make money, but you also need to learn how to keep it, and how to invest it. The advice below may serve as new found knowledge for any aspiring entrepreneur or can be used as a nice refresher course for veterans. Whichever one you are, we’re pretty sure you’ll get something out of it.
Constant education is key
This is the most important section when it comes to managing your finances. While it may not seem like it, it actually does directly impact this area. First of all, you will need to learn as much as you can about every facet of your company. This will allow you to understand where your money is being spent, and if it’s being spent wisely. Furthermore, it can save you from bad investments.
Next, you should learn how to manage your time. Time is money after all, and your very energy and work hours are an investment as well. Learning how to structure your day will help you focus on financial management.
You can also indirectly increase your bottom line by learning how to develop emotional intelligence at the workplace. The happier your people are, the more they trust you, and the more efficient they will be. This leads to better productivity and more money.
Teaching yourself some basic accounting points is also very useful. It will give you a better view of your finances. You will figure out where your money is coming from, and where it is going.
Get a good accountant
A big part of running a company is delegation. And while we still hold to the idea that you should learn some basic bookkeeping, a professional accountant will definitely keep you on the ball at all times. You may think that just because you run a small company that you don’t need one, but know that there is only so much one person can do.
They will help you with the ins and outs of running your company’s finances. They will furthermore assist you in avoiding any scams or bad investments. You may even learn a lot from a good bookkeeper. In fact, often accountants serve as advisors to CEOs, helping them guide their company in the right direction, and saving them from losing money and making bad decisions.
…or accounting software
Of course, another option is getting good financial software. While an actual review of this type of programs is outside of the scope of this article, know that there are plenty of licenses out there that may prove useful. Find one that is well regarded, that has positive reviews in the business world. Know that you should probably invest some money into this, and not download the first free version you find.
This will help you get something of a more direct overview of your finances. It’s also significantly cheaper than a bookkeeper. If you really want to take hold of this aspect of running a business, it’s definitely a good choice. Just remember to be thorough, and to ask for advice if you need to.
Measure everything and be thorough
Measure and record everything. From spending, inventory, to paychecks, salaries. This may seem obvious, but it’s a shame how many entrepreneurs procrastinate and push this back to some later date. But, this doesn’t revolve only on material objects. You should also measure performance.
See how well your people work. Is there performance on track, are they slacking off? Employees have the most direct impact on your company’s finances. If they’re slacking off, so will your bottom line. Or maybe it’s just a motivation problem. Perhaps the equipment you invested in isn’t what it’s cracked up to be. Or, the opposite, you really need to get new gear. If needed, you can always get the software to do this for you.
By being thorough, you know that your company won’t be slowly bleeding money from places you don’t even notice. Random bills, interest from loans, silly expenditures that really don’t add to anything – all this add up rapidly.
A loan can serve as an amazing opportunity and investment. It carries its own risks, of course, but the potential is there. If you get a good loan, you will be able to get that equipment you want. It will help you improve upon your work, it will do wonders for your bottom line. But, as we’ve mentioned, it can be dangerous. If you get a loan that’s too large, or get a bad deal, it can positively ruin your firm.
So before you take out a line of credit, check with some experts. See what kind of deal you can get, and know that the rules vary from place to place, and from country to country. In China, for example, there are many new loans for entrepreneurs who want to open their own business overseas. And never be afraid to ask for advice, but do go local. If you’re set in Melbourne, and you want to get good personal loans in Australia, for example, then you should always contact a local company. They will have much more experience with the local and municipal laws and benefits than someplace that’s on the other side of the country.
Probably the most important part of running a company is managing your finances. Money is your firm’s lifeblood. You need to be smart when it comes to taking out loans, and have a good accountant or accounting software to keep you in check. Measure how well you’re people are doing, track your spending, and never stop learning.