As a small business owner, you have many different roles to play on a daily basis. You might be the marketer, accountant, salesperson, and CEO all in one day. While this is an exciting time where you can see your company grow from a small startup into something much bigger, it also comes with unique challenges. Running your own business means that you need to be responsible for all financial decisions. As a small business owner, you need to be able to master your money so that you can make informed decisions about how to spend it wisely. Here are six ways that you can master your money as a small business owner.
1. Prioritize long-term growth
As a small business owner, you have many different financial responsibilities. You need to pay your employees, you have to pay for your company’s supplies and you have to consider how much money you need to set aside for taxes every year. All these things can eat away your profits and cause you to have less money to reinvest into your company long-term. This means you must prioritize long-term growth over short-term gains at all times.
2. Establish SMART financial goals
Setting financial goals for yourself needs to be SMART: specific, measurable, attainable, relevant, and timely. If your goals don’t meet all of these criteria, they won’t be successful. Specific means that you need to know exactly what your goals are. Measurable means that you are able to quantify your goals so that you can see your progress. Attainable means that you have the skills and resources to achieve your goals. Relevant means that they are tied to your overall business strategy. And finally, timely means that you set a date for when you want to achieve your goals by.
3. Create a Budget
Budgeting is the best way for you to keep track of your financial situation. You might think that budgets are boring and are only for people who are struggling financially, but the truth is that everyone should have a budget. Again, budgets aren’t just for people who are struggling financially; they are for anyone who wants to gain a better understanding of where their money is going each month. Budgets aren’t just something that you do on the first of the month; they are something that you need to keep a close eye on every day. Start by writing down all of your company’s different money-making activities. Then, write down every expense that you have.
4. Make Smart Marketing Decisions
When you are just starting out, you likely don’t have much extra money to invest in marketing initiatives. You must ensure that every marketing dollar you spend is as effective as possible. When choosing which marketing channels to invest in, make sure you choose ones you can track. This means that you need to know how much each channel costs, how many customers it is bringing in, and what the average profit from each customer is.
5. Automate Repetitive Tasks
Running a small business comes with a ton of different daily tasks that are all slightly different. One day you might calculate your company’s monthly profits, and another day you might be counting your revenue. These repetitive tasks can be time-consuming, and if you don’t have a system to streamline them, they can also be incredibly stressful. Automating repetitive tasks is a great way to make your daily tasks less stressful and more productive. It can also save you a significant amount of time each week so that you have more time to devote to other aspects of your business. No matter what type of business you run, several daily tasks would likely benefit from being automated.
6. Utilize Free Accounting Software
The last way to master your money as a small business owner is by utilizing free accounting software. Finding a free accounting software solution that works for your business can be a great way to save money in the long run. There are many different accounting software solutions out there. Some of them are free, and some of them aren’t. If you are starting out, I recommend going with a free solution because it is easier to switch to a paid solution when your company starts to grow if you decide to use a paid solution.
When starting as a small business owner, it can be easy to get caught up in the day-to-day tasks and lose sight of the bigger picture. To succeed both in the short and long term, you need to be able to master your money. When you do this, you will feel more in control of your financial situation and you will be able to make informed decisions about how to spend your money.