Business planning and finance
The key to good business finance management is of course good planning, budgeting and reporting.
Here are a few tips to remember:
· No matter how busy you are, make sure you find time for planning and reporting. This will set the roadmap for income and expenses and provide timely feedback on your progress. There is an array of software to help, including cloud-based solutions that can allow access from anywhere with an internet connection. If things do go bad, it is much better to have time to plan and execute remedies than to be blindsided
· Review your planning on a regular basis and make updates if necessary.
· Be on the conservative side when forecasting. It is wise to slightly underestimate income and slightly overestimate costs.
· Plan some contingency funds to allow you to take advantage of unexpected opportunities
· Cash is king. Make sure projections include cash flow, not just revenue and expenses. Ensure your debtors do not get out of control. Put money aside on a regular basis for those occasional big ticket expenses, ATO payments etc
· If you need to arrange some form of finance, then make sure you do the homework. Consider why you need the finance, the costs, the flexibility of arrangements and other factors that may impact in your business. There is an extremely wide array of finance products available so make sure you get the best one for your business circumstances.
· If you have surplus funds, don’t just leave them sitting in your normal business account. For flexibility, a linked high interest account can be useful. Any additional interest earned goes straight to the pre-tax bottom line.
Alternatively, you can consider paying off debt, particularly high interest debt.