When you’re a fledgling business, it’s important to cultivate healthy financial habits early on. For a small business, good financial habits can be the difference between failure and success. Here are Hotman & Brown’s top tips for healthy financial habits for small business success.
Watch what your business is spending
It’s financial advice that is a tale as old as time––but keeping track of spending, and accounting for every penny that comes in and out of a small business is crucial for success. The number 1 rule is always spend less than you earn.
Learn to live on less
For any small business or startup, this is a habit worth forming early on. This is about learning to live on less than you’ve been used to. When starting out as a small business, founders often have to live on a wage that might be less than they are used to. But learning to cut unnecessary expenditure is a key to financial health and success.
Keep building your business finances
Between running costs and affording yourself meagre living expenses, it might seem impossible for a small business to save any money. But saving money is crucial to keeping your business alive. By saving money, you will contribute to the overall financial health of your business over time. Having access to capital is crucial for small business.
Keep on top of your bank account
Pick a specific time every single week––and check in with your business accounts. Know exactly how your business’ finances are looking from week to week.
As a small business owner, you should learn how to read your balance sheet and your profit and loss statements. Small businesses need do this every week to gain a firm understanding of their financial position.
Get a good bookkeeper or accountant
In your early days as a small business, find a good bookkeeper or an accountant that will help you understand your finances. Your small business accountant is one of your most important business relationships and will help you to make sure that your business is on the right track.
Keep your personal and your business account separate
This is a crucial habit for healthy finances. Having a separate business account makes accounting for spending easier and less confusing. And it makes it easier to see how your business is performing.