Financing a business of any size is important, but for small businesses it is even more crucial to keep on top of things like cash flow so that the business can operate effectively as well as exploit opportunities to grow.
Here are some financing tips that will help all small businesses, whatever industry they’re operating in.
Be a Lean Machine
One of the biggest problems small businesses face is that they take the idea of “acting like a big business” to the extreme, and will commonly splash out money they don’t really have on things they don’t really need.
Hopefully, you’re reading this because you’re planning to launch a small business, because if you already have and aren’t doing this the chances are that you’re already in trouble.
Get by on what you can and only buy equipment or services that are going to help you to grow the business as quickly as possible.
For some eye-opening information, here’s the study conducted by Robbins Research International. The study shows that most business owners (77%) believe they will be able to grow their business through the next recession, even though they are less sure about how they will do so.
If you are a lean machine and there are opportunities to expand the business and make great profits, you’ll find it easier to seek and acquire investment. The main thing you need to consider when looking out for investment is that money will need to exit the company again at some point in the future, be it in installments or as a lump sum, including a profitable return for the investor.
Private equity groups as well as asset managers like ACPI may be able to invest or point you in the right direction of companies or investors that could help you.
Connect with Finance Professionals
We’re talking here about connecting on a semi-formal basis, usually using platforms such as social media. It is easy to find professionals like Brett Lankester who regularly share updates and even post the occasional blog so you can get advice.
Look for professionals who specialize in your specific industry, they’re easy to find using the big social networks, particularly LinkedIn, and you’ll soon start to pick up free tips and advice that are worth a great deal to you.
Do What You Can Yourself
Getting a business up and running is tough, and part of the reason for this is that you end up doing most of the work yourself. However, this will need to be the reality for probably at least the first six months of your existence as a business. Taking on your first ‘other’ employee should be a big step that you take only when you really need to, which will usually be when your business grows to such a point that your workload could potentially lessen the quality of work you provide to clients.
Find a Great Accountant
Accountants won’t run your business for you, but they will prove to be an invaluable source of advice and guidance, as well as being able to complete all the paperwork that comes with your business finances. If you have a great accountant, like becomes a hell of a lot easier!
Keep these tips in mind for your small business, and set yourself on the path to consistent success.
- License: Creative Commons image source
David Briggs is a business consultant who works with start-up companies to assist with the business planning and initial set up phase, particularly in the first six months of operations. David lives in Manchester, England, with his son.