A recorded 20% of businesses fail in the first 12 months. Throw it ten years down the line and that number jumps to 2 out of every 3. 66% of businesses fail within the first decade of operation. That means of the recorded 32.5 million small businesses in the US today, 21.45 million will not see 2032. The main reason, in short: no money. The average small business faces challenges when getting off the ground, so it’s pivotal to know how to organize small business finances. Typically if a business is not growing it’s dying. For the small business owner stacking laborious hour upon laborious hour, having no residual income rarely carries its own worth. After all, you don’t get the benefit of an employer-matched retirement plan.
Individuals create small businesses due to many reasons. Some include the passion to fulfill a need, generate wealth, and/or drive the economy. Yet most small businesses average around 2-3 years before they start turning a residual profit for their owner. That being said, with proper financing the shrewd owner can cut the time for their small business to reach that turnaround and more importantly keep a business well above its baseline.
Removing unnecessary workplace inhibitors will help you reach a pronounced and streamlined workflow that will allot you more time and peace of mind throughout your client acquisition, through the final transaction process. Here are six simple ways that can effectively teach you how to organize small business finances. Some options are cheap or even free. Likewise, they are partnered with an alternative that may cost more, for the business that has caught its wind.
Organize Your Workspace
Keep things clean. Like any aspect of success, a business propagates itself by accomplishing tasks. By reducing any unnecessary clutter a business is able to hone in on the focus at hand: Completing tasks.
Sort through and purge unnecessary or outdated files. Begin factoring them into areas and files based on their necessity, timeliness, and proximity. Keep your workspace sorted so that everything on your desk has an easily noticeable and recognizable impact.
Look into specific deskware that may help break and structure your documents. Many recommend a standing desk as an alternative to the much more-widely articulated sedentary alternative. Beyond a desk, utilizing an employee to take some time to organize files, or getting a secretary altogether may help offer streamlining utility.
Take Your Files Digital
A major answer to how to organize small business finances is technology. Additionally, one of the things technology has granted us is efficiency. By keeping files in the digital space you reduce the clutter of your physical location. This in turn should begin to create mental clarity and objective-based focus within yourself.
Take records to the computer. Your computer is your most simple and basic outreach hub. Have your files there. By doing this you are offering yourself the ability to have a centrally loathed storage hub for all your separate entities, while also having the retrieval time condensed thanks to the absence of physical space.
Keeping things digital also allows for seamless storage and recollection allowing for a unique ability to juggle, balance, and elect any different document or set of documents at a moment’s notice.
Use Free Software to Ease Workflow
This is one of the key steps to an easy workflow and seamless project pipeline. Using software in the cloud allows for multiple employees to simultaneously develop and critique all projects and workflow ideas actively regardless of schedule or proximity. This includes client management software like Keap or Monday, both of which exist to streamline internal workflows and easily maintain that retained client base.
Now, while these paid software and programs are nice and take it to the next step, proper use of the Google Suite can allow for what is essentially free internal communications software. And again, while this may not be as fully comprehensive as other options it will allow for a streamlined production method for the developing business.
All of this will help reduce clutter in your physical workspace. Plus, by design, will act as a hub for your business’s dealings that can keep you organized. Essentially, this saves you time and allows for greater mental clarity to enjoy that time.
Streamline Payment and Billing Practices
Keep your finances clean cut and focused. Like everything within the enterprise, managing time and mental investment is the goal here. Whatever system your company uses, look to trim any unnecessary junctions. Keep the system as “a-to-b” as possible. The fewer stops mean fewer hands are used. This means the less money it takes, and the less of a chance for errors.
Look into whatever software or people-related assets you already have and see if they are capable of cutting in certain areas or conjoining them with others to more fully encompass the most necessary tasks of getting those payment options secured.
Additionally keeping payment frequencies consistent and aligned is critical. While this may seem like a given, having everything on a set date once again cleans up your “human RAM” and should grant more holistic focus to other business happenstances and ongoings.
Keep Everything In-House
While at first this may seem counter-intuitive keeping things in-house is a great way to maintain efficiency throughout any messy or seemingly unknowable moment. Finance management software can be a lifesaver with this. And even if your company is not in a place to justify such means, keeping it in the company with an individual bookkeeper is a great way to have all your finances directly under your feet and readily available when you need them.
Limit Unnecessary Investments
This is the big one on how to organize small business finances. Know when to grow aggressively and when to grow at a financially-conscientious rate. By separating the two, you can hold your finances more tightly when needed by allotting time for rapid expansion-centric purchases. By knowing the trends of your last several quarters, a business can set itself up to understand the outlook of future quarters and plan accordingly. This allows the smart investor to capitalize on key purchasing moments. Plus, they don’t get bogged down in a finance book or production with a new piece of equipment to manage and integrate.
This article has largely been about streamlining and organizing your small business. Obviously, why not trim unnecessary expenditures and streamline the process as much as possible? However, it is just as much an article about the psychological benefits of a clutter-free work life. By keeping mental control over a greatly reduced set of stimuli your brain can relax by feeling more understanding and in control of what it needs to have under it.