When you’re struggling to build your small business, it can be a challenge to juggle funds, pay bills, manage suppliers, and still have enough to live day-to-day. However, with a few small tweaks, you can make your money stretch further and be more successful. Here are the top 5 things you’re doing wrong with your small business budget and how you can change them.
Not Paying Yourself First
If you aren’t planning for your future, you are going to regret it at some point. You need to live while growing your business, so you have to come up with a reasonable balance between investing growing your business and paying your own bills. In addition, you should put a little away into savings and/or retirement.
You don’t have to make a six-figure salary at first, but you do need to take a hard look at what you need to get by.
Not Planning for Emergencies
No matter what kind of business you’re running, you can be sure at some point you’ll either have repair costs, or a late paid invoice, or some other unplanned emergency.
The first thing you should do as a smart business owner is to get an emergency fund in place to cover these unexpected costs. You should have a small buffer of at least a couple thousand dollars to cover emergency expenses.
Too Much Overhead
Sure, that space at the local mall gets a lot of foot traffic, but you’ll also pay a premium price for that space. Is there another spot that is easily accessible with lower overhead?
If your monthly overhead costs are too high, you risk going bankrupt before you can turn a profit.
Too Many Employees
During busy times such as Christmas and back to school, you’ll likely hired extra staff to cover the traffic. However, when business the busy season ends, do you have too many employees? If your workers are standing around without anything to do, then you likely have too many.
Each employee costs you wages, benefits (if you offer any) and training time. Instead, consider hiring temporary or seasonal workers to cover busy times and keep only the workers you absolutely need for the rest of the year.
Not Keeping Excellent Records
Small business owners are busy. It is time consuming to track every little receipt that comes in and every check that goes out. However, if you don’t keep track as you go along, the task can quickly become overwhelming. You’ll need this information at the end of the quarter for taxes.
The last thing you want to do is have to hire an accounting firm to come in and clean up your books, because that can be stressful, time-consuming, and costly.
These are just a few common mistakes business owners make. By making just a few changes, your business will be more primed for success in the long run.
Disclaimer: A merchant cash advance is the purchase of future credit card or debit card sales and is not a loan product.