Simple Ways to Manage Your Small Business Finances

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As small business owners we bring products directly to our communities. All small business owners are entrepreneurs: creatives reaching out and developing new and unique ideas on a daily basis. Only about half of small businesses make it past the five year mark. If you want your small business venture to be successful follow these 6 simple steps towards taking control of your small business’ financial future. 

First things first you should open a bank account and credit card specifically for your small business. You don’t want to fall into the trap of using personal finances to give your business a boost. Having a separate account will help you keep track of your spending and properly execute payroll. In addition, by using a business credit card you can take advantage of 0% APR for startup costs and use the cash back features to set up a business savings account and set money aside for a rainy day.

“In addition to cutting costs where possible, consider using a business credit card as a purchasing tool to earn rewards on everyday expenses. For example, insurance is usually a large expense, and entrepreneurs can earn significant cashback rewards when they pay for it with a credit card. You can reinvest those cashback rewards in your business in the form of new equipment, employee bonuses and so on.”

- Jenn Flynn, Small Business Bank at Capital One

“As a company which provides video storytelling we had to invest in high quality equipment. By putting these expenses on our business credit card we were able to use the cash back features to invest in our marketing. This helped us reach more customers and increase our ROI.”

Stephen Skeel, Co-Founder and Executive Producer at 7 Wonders Cinema 

You want to make sure you have strategies in place to track spending and pay your employees and invoices on time. 

“Time is money for small-business owners. Most did not start a business with financial expertise or interest in pouring hours of time into necessary processes such as payroll, accounting and taxes, vendor payment and management, and more. It may behoove you to explore platforms that make this part of starting and managing a business much more efficient so you can focus your valuable time on growth.”

- Dan Henry, CEO at Green Dot

One option to make your accounting system easier on yourself is to outsource accounting or HR. This will take some of the pressure off of you so you can better focus on essential tasks in running your small business. 

“Hiring a full staff, including HR and accounting, can be expensive when starting out. By outsourcing these departments we were able to save money upfront, while still having someone with the right expertise complete these essential tasks.”

Francis Pollara, Co-Founder and Head of Product and Growth at The Future Party

Rather than outsourcing you can save time and money by using automated services for payroll, accounting, and budgeting software. 

“Small businesses operating with a limited budget should absolutely reexamine their payroll costs. In addition to saving time, an automated payroll system can help you cut costs and stay within budget. On average, it takes five to ten days for a small business to resolve a payroll error. Instead of wasting time on tedious tasks, payroll automation saves time and money by reducing errors.” 

- Mara Garcia, CFO at Phonexa Holdings, LLC

Quickbooks is an excellent low cost resource which allows you to easily link your accounts, track spending, and organize payroll and invoices. There are also free accounting services you can take advantage of during the early stages of developing your small business, some options include:

  • ZipBooks 

  • Zoho Books 

  • Sunrise 

  • Wave

Once you’ve automated your system or outsourced/hired an accounting team you already have a leg up when tax season inevitably comes around. Be ready to leverage this season by taking advantage of cloud based accounting solutions to save all receipts from business related expenses. When you keep all your financial information organized and readily available you are better prepared for any curve balls thrown your way. 

“Tax season is so much easier when you use software to properly organize and store all business invoices and receipts. By staying vigilant in uploading documents throughout the year we don’t have to waste valuable time getting everything organized when tax season comes around.”

–  Omid Semino, CEO and Founder at Diamond Mansion 

“Balancing your money is the key to having enough.”

― From All Your Worth by Elizabeth Warren and Amelia Warren Tyagin

When you take control of your budget you take control of your business. Once you have the data available take the time to look into what you choose to invest in. Ask: Is this investment providing my business a ROI, return on investment? 

“Start by looking at your biggest expenses and contracts. Go through them one by one, looking for opportunities to negotiate and reduce costs or find more cost-efficient vendors. With inflation rising, it is a good time to consider some max-price terms that could help mitigate rising costs of goods sold.” 

- Kelly Crane, CFP®, CFA, CLU, MBA, Napa Valley Wealth Management, Inc.


“Nowadays, small businesses channel much of their budget into digital advertising. Yet, there’s lots of avoidable waste in their investments. Google and Facebook don’t build technology to help businesses automate and focus on high-performing ads. It’s incumbent upon businesses to watch their campaigns like hawks and calibrate accordingly. Not monitoring ad campaigns can quickly wipe out your margins.”

- Jaideep Singh, Founder & CEO at FlyFin AI, Inc.

Investing in a strong digital marketing company could help you better automate your strategies and achieve a higher ROI. 

“Choosing to invest in a digital marketing company was one of the best decisions we made for our brand. Our engagement increased across socials. Their knowledge helped us drive this increased engagement to a more solid subscriber base which brought in more sales. ”

Haim Medine, Creative Director at Mark Henry 

When your business starts increasing its ROI it can be tempting to invest all of it directly back into the company. It is essential to balance investing and saving to ensure your company's success. 

“Having spare cash in the bank can be useful in staying ahead, but some of that money can even be invested in other business stock, bonds, and other vehicles. Consult with a professional money manager to determine the best ways to invest your money while you have it.”

– The Better Business Bureau 

You want to ensure you have enough money in your business savings account to cover expenses for up to three months; but, when you properly budget and forecast your business’ cash flow you will learn when the best times to invest come around. 

“If you constantly chase cost reduction, you will ultimately wear the system down into total failure.” 

— MIT Sloan Senior Lecturer John Carrier

It may seem counterintuitive but when your business is doing well that can be the best time to apply for a small business loan. Banks only approve about 21% of these small business loans so by applying when you are seeing a higher profit can help you invest in the growth of your small business. 

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