An entrepreneur can have small innovative business ideas for the development of their enterprise. But if they are not feasible or viable, they will remain as only that, ideas. Every entrepreneur in any field needs to have the knowledge. And have a team that maintains the financial part and that ensures the sustainability of the business.
Here are 10 tips that will guide you to keep your finances healthy
- Organize the financial information of your small innovative business
- Eliminate unnecessary expenses
- Separate your personal finances from the company’s finances
- Minimize the use of paper in your company
- Prepares financial projections and budgets
- Invest in the strategic areas of your small innovative business
- Invest in your own premises
- Think long-term, but act in the short term
- Stop investing in projects that generate more wear than profitability
- Constantly analyze the financial information of your company
Also, see 10 phrases to keep your finances afloat
1. Organize the financial information of your small innovative business
As an entrepreneurial leader, you must be clear about each of the figures of your business. Take advantage of different tools and technological applications to put all the numbers in order. Even if your company has a finance manager, as a team leader, it is your obligation to understand where the money comes from, how many are the revenues. How many are the expenses, what is the profit.
You may also like to read: How to find the right financing plan for your small (IT) business
2. Eliminate unnecessary expenses
Once you have organized the financial information of your company, you will be able to see clearly what are those unnecessary expenses that month after month is affecting the utilities.
3. Separate your personal finances from the company’s finances
Both are handled differently, although the financial management of your company will provide you with a certain salary, the fact that you are the manager does not give you the right to use the company’s economic resources for personal matters, thereby causing an imbalance to the detriment of the company’s finances.
4. Minimize the use of paper in your company
With the advance of technology, the files and documents on paper are being left behind. Now companies are migrating to the digital field which brings great savings in paper expenses. If you still keep records, contracts and other types of documents manually, it’s time for you to join the Tech trend for document management.
The recent operating systems and the internet bring a diversity of accounting, administration and other tools. Implementing applications such as Dropbox and Google Drive, you can efficiently manage business documents without having to complicate your life. In addition to saving money, you will be contributing to the environment.
5. Prepares financial projections and budgets
The performance of your small innovative business is not something that should be left to chance, on the contrary, you must set financial goals, develop budgets (and meet them), make financial projections and track the achievement of goals.
6. Invest in the strategic areas of your small innovative business
The proper management of finances is not only about saving resources to increase capital but also about smart investments. Successful entrepreneurs invest in these potential strategic areas for the growth of their business, namely: product development, human talent, training, marketing, corporate image, infrastructure, systematization of processes and other areas directly related to business performance.
7. Invest in your own premises
Do accounts and determine if it is better for you to continue paying rent or rent or use the money to acquire your own premises. Real estate becomes part of the assets of your company and in the long term will allow you to increase profits.
8. Think long-term, but act in the short term
Many of the small innovative businesses live facing the obligations of day to day, leaving aside their long-term projection. In this situation, these companies are only survivors because they generate income to meet the needs of day to day, with this dynamic they will hardly grow. At this point, small businesses must take time to establish long-term plans that allow their realization on the day.
In this way, the revenues will be in one part to meet the needs of the day to day and the other part intended for investment in the later and thus be able to achieve the long-term objectives that will allow the expansion of the business. It is a challenge, but with patience, vision, and discipline you will see your company grow.
9. Stop investing in projects that generate more wear than profitability
As entrepreneurs, we often bet on large projects that apparently have great potential, but many of these are no longer viable for different reasons and become a tremendous waste of economic resources and time. If you feel that a project has no potential and the numbers are not encouraging, you should make the decision to stop investing in it.
This decision is usually difficult to make because in most cases there is passion, friends and other factors that can affect your decision emotionally, but your role as an entrepreneur is to make decisions that maximize the value of the company.
10. Constantly analyze the financial information of your company
As an entrepreneurial leader, you must not only understand information about your company’s finances, you must also analyze these numbers to take on later decisions. Your finance team will provide you with data and can give you an orientation or projection of the figures, but it is up to you to which direction to place the rudder. Therefore, finances should be like your daily bread, this in addition to knowing your company as the palm of your hand, will allow you to make appropriate decisions to improve your small innovative business performance and take a cold head the decisions to grow in a sustainable manner.
